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Traditionally, regulations are seen as harmful for the starting and growing of firms. However, strict environmental regulation can also trigger the discovery and introduction of clean technologies, and this innovation might improve the competitiveness of the firm. In this paper, the authors will test this environmental regulation paradox in the context of new venture growth. The key questions are: to what extent do new ventures perceive environmental regulation to be a bottleneck; and how does environmental regulation affect the growth of clean tech ventures? They analyze the characteristics of a panel of new ventures during their emergence, and trace the effect of environmental regulation on the subsequent growth of these new ventures.
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