Environmental Innovations and Strategies for the Development of New Production Technologies: Empirical Evidence from Europe

This study empirically investigates whether firms' improvements in energy and material efficiency are related to the extent to which external partners are involved in the development of process innovations. In particular, we distinguish three different process innovation strategies: firms may follow an ‘in‐house strategy’ and develop their innovations mainly within the firm, they may opt for an ‘external strategy’ and let mainly external partners develop innovations, or they may opt for a ‘cooperation strategy’ and develop innovations jointly with external partners. Using data of manufacturing firms obtained from the fourth Community Innovation Survey covering 14 European countries, we conduct total sample as well as industry‐ and country‐specific regressions. Our results indicate that firms following the ‘external strategy’ tend to have a lower probability of introducing process innovations leading to a marked increase in energy and material efficiency. Moreover, in contrast to extant literature, none of our results suggests that companies following a ‘cooperation strategy’ experience greater environmental innovation performance. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment