Sustainability Strategy and Eco‐Innovation: A Moderation Model

This study develops a moderation model to examine the role of a proactive environmental strategy on eco‐innovation. Drawing upon the perspectives of contingency theory, this study argues that the impacts of sustainability strategy on eco‐innovation depend on market demand, innovation intensity and government subsidy. The sample used to test the hypotheses is obtained from the Community Innovation Survey in Taiwan. A total of 2955 manufacturing firms are included in the final sample. A logit moderating regression is adopted to analyze the models. The results reveal that market demand and government subsidy positively moderate the relationship between environmental strategy and eco‐innovation. Specifically, firms are more likely to adopt a proactive environmental strategy to improve eco‐innovation under high levels of market demand and government subsidy. Furthermore, the results indicate that innovation intensity affects the effect of environmental strategy on eco‐innovation, but the direction of the influence varies with different categories of eco‐innovation. Copyright © 2016 John Wiley & Sons, Ltd and ERP Environment     

The Importance of the Diverse Drivers and Types of Environmental Innovation for Firm Performance

Today, firms are faced with a number of environmental challenges, such as global warming, pollution control and declining natural resources. While there is increasing pressure to deliver environmentally friendly products and services, little is known about what drives the many different types of environmental innovation, or how such pursuits' impact firm performance. Using a sample of 2181 firms, this paper examines the factors that drive nine different types of eco‐innovation in Ireland, and assesses how such innovations impact firm performance. We find that, while demand‐side, supply‐side and regulatory drivers impact on the likelihood of a firm engaging in eco‐innovation, the relative magnitudes of these impacts vary across the types of eco‐innovation considered. Moreover, we find that only two of the nine types of eco‐innovation positively impact firm performance. The results point to regulation and customer pressure as viable mechanisms through which firms can be encouraged to eco‐innovate. Copyright © 2014 John Wiley & Sons, Ltd and ERP Environment     

Leaders and Laggards in Environmental Innovation: An Empirical Analysis of SMEs in Europe

The main purpose of this article is studying the factors influencing eco‐innovative intensity in the European SMEs. Building upon the 'innovation triangle model', business competences, environmental orientation and network involvement are considered as the main determinants of 'greenness' of innovation in a sample of 3852 SMEs. Four categories of eco‐innovators (leaders, followers, loungers and laggards) are identified, and their profiles/driving factors are described using a generalized ordinal logistic model. Our results confirm that the increasing demand for green products and the adoption of eco‐organizational innovation affect positively the level of environmental innovation, while technological lock‐ins have the opposite effect across all categories. Neither leaders nor laggards are influenced by environmental policies. Small firms and those who give importance to financial constraints tend not to achieve upper categories, while valuing technological capabilities, market power and networks are crucial determinants of being in upper categories of eco‐innovation intensity. Copyright © 2014 John Wiley & Sons, Ltd and ERP Environment     

Is environmental innovation conducive to corporate financing? The moderating role of advertising expenditures

Environmental innovation is an important way for firms to achieve sustainable development and acquire resources. Based on the stakeholder, resource dependence, and signal transmission theories, this study divided environmental innovation into substantive and strategic eco‐innovation and constructed a relationship model among environmental innovation, advertising expenditures, and corporate financing. Selecting 162 Chinese manufacturing listed companies from 2012 to 2017 as the research sample and adopting the multiple regression analysis method, the study found that substantive eco‐innovation had a positive effect on corporate financing, but strategic eco‐innovation had a significant negative effect on corporate financing. Further, advertising expenditures played a positive moderating role between substantive eco‐innovation, strategic eco‐innovation, and corporate financing. The robustness test further confirmed these results.     

Innovation as a driver of eco‐innovation in the firm: An approach from the dynamic capabilities theory

The aim of this study is to investigate how innovative capabilities of the firm affect eco‐innovation from a dynamic capability lens. We build on OECD research to conceptualise eco‐innovation as the capacity with which firms modify, redesign, and create products, processes, procedures, and organisations in order to reduce environmental impact. We propose and test the temporal and relational properties of eco‐innovation as a capability. We demonstrate that eco‐innovation possesses two properties of innovative capabilities, namely, persistence over time and interrelation with other innovations. We thus shed new light on the mechanism through which firms engage in eco‐innovation. We also provide empirical evidence to the debate on the relationship between the “normal” innovation (technological or nontechnological) and eco‐innovation. We show that eco‐innovation and innovation are interrelated both simultaneously and sequentially. Moreover, we show that innovation capabilities and eco‐innovation are not only related, but they also have a complementary nature, which facilitates the development of future eco‐innovation.     

What drives environmental innovation? A meta-analysis

To clarify the drivers of environmental innovation, this study selected 50 independent samples from 49 publications to investigate the effects of four major factors—policy, market, resource capacity, and organizational characteristics—on environmental innovation using a meta-analysis, as well as demonstrating the moderating role of cultural background and industrial diversity. The results show that both environmental regulations and government subsidies positively promote environmental innovation and that cultural background and industrial diversity do play moderating roles in how environmental regulations impact environmental innovation. Furthermore, customer demand is also shown to have a positive impact on environmental innovation and is moderated by industrial diversity. However, market concentration is not shown to significantly affect environmental innovation. The results also show that knowledge sources, technological capabilities, organization's performance, and environmental management systems positively influence environmental innovation. Additionally, cultural background plays a moderating role between an organization's performance and environmental innovation, and industrial diversity can moderate technological capability and environmental innovation. Finally, the size of an organization is shown to positively affect environmental innovation and is also moderated by cultural background.     

Why does eco‐innovation differ in service firms? Some insights from Spain

Although environmental innovation studies have traditionally focused on manufacturing firms, the distinctive features of eco‐innovation activities carried out by service firms require special attention. Using the Spanish Commumity Innovation Survey (CIS), this paper determines which are the main drivers of undertaking eco‐innovation and investigates the similarities and differences between service and manufacturing firms within the five sub‐groups of services (supplier dominated, scale intensive physical networks, scale intensive information networks, science‐based, and others). The results confirm that the main eco‐innovation triggers are similar—technological push factor orientation (internal R&D and persistence) and firm size—while the impact of market pull factors and public environmental legislation differ within the services sub‐groups. In addition, we find a high degree of heterogeneity within service firms. In contrast to traditional service firms, those in the groups involving R&D activities, information networks, and scale‐intensive physical networks exhibit intensive eco‐innovation performance and show a high level of green indicators.     

Environmental management capabilities for a “circular eco‐innovation”

At a micro level, eco‐innovation marks a transition towards a circular economy (CE), and standardised routines and controls are being implemented by businesses to introduce eco‐innovative processes and thus a circular business model. Eco‐innovation applied to a circular model implies changes to companies' environmental management and accounting practices used to manage natural resources. In this context, this study analyses and measures formal and informal environmental management systems, such as certification standards and other management and environmental accounting procedures used in eco‐innovation and the CE within the dynamic capabilities theoretical framework. The study also investigates the cause‐and‐effect relationship between firms' “circular eco‐innovation” and environmental capabilities using partial least squares structural equation modelling and tests it using a sample of Spanish companies. This study offers new knowledge about the interposition of business eco‐innovation and CE‐related activities introduced by firms from the dynamic capabilities perspective.     

Innovation intensity,creativity enhancement,and eco‐innovation strategy: The roles of customer demand and environmental regulation

This study develops a contingency framework to investigate how and when innovation intensity and creativity enhancement affect a firm's eco‐innovation strategy by drawing upon the perspectives of the resource‐based view and stakeholder theory. This investigation aims to explore whether firms with high innovation intensity and creativity enhancement really pursue eco‐innovation strategy. Our examination is based on a sample of 2,126 manufacturing firms. By using a hierarchical regression, the results reveal that the effects of innovation intensity and creativity enhancement on eco‐innovation strategy depend on customer demand and environmental regulation. Specifically, customer demand positively moderates the effects of innovation intensity and creativity enhancement on eco‐innovation strategy, whereas existing regulation has a weaker effect on the relationship between innovation activities and eco‐innovation strategy than that of anticipated regulation.     

The effect of regional factors in the development of eco‐innovations in the firm

This research addresses the study of the effect of regional factors in the development of eco‐innovations in the firm. We assume the hypothesis of regional heterogeneity, that is, geographical factors and the regional heterogeneity play an important role in determining the innovations in the firms. In this line, we will approach our study from the perspective of regional innovation systems (RISs). Therefore, our research question involves the evaluation of regional factors as determinants of eco‐innovation developing in the firm. To examine these questions, the PITEC database that covers the period 2011–2013 was used. Overall, 5,461 firms have been employed for the ordinal logit regression model. This research contributes to the studies of eco‐innovation, extending the investigation into drivers of eco‐innovation, and highlights the impact that RIS has on the eco‐innovative development in the firm. We find that regional interaction and regional characteristics are key elements for the development of eco‐innovation in firms. Thus, the density of companies in the region, the regional per capita income, and the existence of financing mechanisms are key elements for the eco‐innovative development in the firm.     

Driving sectoral sustainability via the diffusion of organizational eco‐innovations

Using insights from institutional literature, the resource‐based theory of the firm, and internationalization, we explain variations in the diffusion of organizational eco‐innovations. Studies have previously reported that the drivers of eco‐innovation are regulatory pressures, technology push, market pull, and firm factors. But relatively little attention has been paid to nontechnological forms of eco‐innovation, such as environmental management systems (EMS). Consequently, how exactly to encourage EMS adoption across sectors is still unclear. We attempt to address this question by combining sectoral panel data (2009–2014) from a number of sources in Spain. The econometric analysis reveals that environmental policy is driving the adoption of ISO 14001 largely due to differences across sectors in energy and pollution intensity. In addition, the adoption of ISO 9001 increases the use of ISO 14001 in industry because of complementarities between the two systems. Third, in highly internationalized sectors, firms adopt a greater amount of ISO 14001.     

Does corporate environmental responsibility engagement affect firm value? The mediating role of corporate innovation

This paper aims to construct a comprehensive corporate environmental responsibility (CER) engagement measurement to examine the relationship between CER engagement and firm value as well as explore the mediating effect of corporate innovation on this relationship based on a sample of 496 China's A‐share listed companies from 2008 to 2016. The results show that when firms start to adopt environmental regulations, CER would have a negative effect on firm value; however, at a specific level, CER would start to enhance firm value positively. In addition to this, corporate innovation plays a mediating role in the relationship between CER and firm value. Corporate innovation promotes firm value of firms with CER more than firms without CER. Overall, the findings of this paper are extremely relevant for the government, investors, and firm's managers and can be utilized for policy and investment decision making. Also, the findings encourage firms to enhance their sense of environmental responsibility in order to enhance their competitive advantages, enhance corporate innovation capabilities, and thus enhance firm value.     

Does Innovation Drive Environmental Disclosure? A New Insight into Sustainable Development

Sustainable development is a hot topic in business and the media, and there is a growing demand for reliable environmental disclosure from a wide range of stakeholders. Ethical performance, including social and environmental performance, is actively scrutinized. A firm's stakeholders expect reliable disclosure to correctly assess its performance. Research on the link between environmental disclosure and environmental performance shows mixed results. Both a positive and a negative association have been found. This study reexamines this association by considering environmental innovation as a key determinant of environmental disclosure. We find that environmental performance and environmental innovation jointly determine environmental disclosure. At low levels of environmental performance, innovative firms tend to disclose more than their non‐innovative counterparts to inform stakeholders about their innovation and strategy to obtain an improved environmental performance. This disclosure gap tends to diminish as innovative firms become better environmental performers. The higher levels of environmental disclosure are closely associated with firms' environmental performance for both groups. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment     

Does the Eco‐Management and Audit Scheme Foster Innovation in European Firms?

This paper studies whether environmental management systems can spur eco‐innovation, analyzing EMAS (Eco‐Management and Audit Scheme) adoption and patented innovations (at the European Patent Office) at firm level. It uses an original panel database of 30 439 European firms belonging to all sectors from 2003 to 2012. An original instrumental variable is implemented to control for potential endogeneity. The analysis reveals that EMAS adoption is conducive to more innovation at the firm level. The results vary across countries and sectors. In particular, EMAS is positively related to green patents for medium and low technology manufacturing. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment     

The influence of managerial satisfaction on corporate environmental performance and reputation

Organizational studies have widely debated the relationship between job satisfaction and job performance. Some papers have dealt with managerial satisfaction and businesses' performance adopting agency theory to interpret the results. However, no studies have yet considered the relationship between the satisfaction levels of an environmental manager and corporate environmental performance. This paper thus analyses the role played by the environmental manager's satisfaction in enhancing corporate environmental performance and reputation. The paper uses data from a survey of 412 Eco Management and Audit Scheme registered organizations. The results show a positive relationship between managerial satisfaction and environmental performance, whereas no such positive relationship was found when considering eco‐innovation performance. In addition, the environmental manager's satisfaction has a positive and indirect influence on the corporate environmental reputation. These results contribute to the literature on agency theory and aim to extend the debate between job satisfaction and job performance to the sustainable business field.     

Eco‐innovation motivations and ecodesign tool implementation in companies in the Nordic textile and information technology sectors

The current sustainability challenges and the required systemic transformation highlight the need for innovations on multiple levels. Ecodesign integrates environmental aspects into product and process design to reduce environmental impacts, whereas eco‐innovation also concerns nontechnological solutions. In this paper, we formulate a model that combines eco‐innovation targets ad mechanisms with sustainability maturity, which also concerns stimuli and barriers faced by companies and ecodesign tools used. The results are based on a questionnaire sent to 902 textile and information technology (IT) companies (N = 104) in the Nordic countries. The tools that Nordic textile and IT companies use in particular are life cycle assessment, type I ecolabel, and carbon footprint. Internal stimuli, especially general willingness, were important for eco‐innovativeness, while legislation and customer demand also pushed companies forward. Specific no‐go barriers were not identified, although increase in costs was a common barrier. The respondents focus often on technological product innovations, but rarely on functional innovation, renting of products, and so forth. This highlights the need to address the availability of the right kind of tools to support a broader suite of innovation that can drive toward the circular economy.     

Green Product Innovation in Manufacturing Firms: A Sustainability‐Oriented Dynamic Capability Perspective

Despite environmental sustainability being identified as one of the key drivers of innovation, extant literature lacks a theoretically sound and empirically testable framework that can provide specific insights into green product innovation from a capability perspective. This study develops a theoretical framework from a sustainability‐oriented dynamic capability (SODC) perspective. We conceive SODCs as consisting of three underlying processes (external resource integration, internal resource integration, and resource building and reconfiguration) that influence the change/renewal of sustainability‐oriented ordinary capabilities (SOOCs) (green innovation capability and eco‐design capability). This study answers two key questions: which SODCs are needed to develop green innovation and eco‐design capabilities? Which of these capabilities lead to better market performance of green products? We test a structural model linking SODCs to market performance in 189 Italian manufacturing firms. First, we find that the nature of the SODC–performance link (direct or indirect) depends on the SODC type. Specifically, resource building and reconfiguration is the only SODC with a direct effect on market performance. Second, all three types of SODC affect the eco‐design capability, which mediates the link between SODCs and market performance. Third, we find that external resource integration is the only SODC affecting the green innovation capability, which mediates the link between external resource integration and market performance. Resource building and reconfiguration is the SODC with the overall (direct and indirect) highest impact on market performance. This study, among the first to consider capabilities for green product innovation under a dynamic capability perspective, provides implications for scholars, managers and policy makers. Copyright © 2016 John Wiley & Sons, Ltd and ERP Environment     

Sustainable development: The effects of environmental policy disclosure in advertising

Sustainable development is a key issue for society. Beside corporate's efforts, consumers should have responsibilities for environmental protection and consider sustainable coexistences between future generations and natural ecosystems. In this study, a 4 × 2 factorial between‐subject experiment is adopted to develop eight environmental policy disclosure scenarios based on different environmental advertising claims (product orientation, process orientation, image orientation, and environmental fact) and eco‐labels (available/unavailable) to explore the effect of consumer attitudes and behaviors. This study's results show that environmental advertising claims have significant effects on consumers' attitudes. The product, process, and image orientation advertising, along with advertising with eco‐labels, can induce more positive attitudes and stronger purchase intentions. Individuals with greater environmental concerns have a significant positive attitude toward environmental advertising. Consumer attitudes toward environmental advertising also have positive effects on purchase intentions and sustainable consumption behaviors. Finally, this study offers useful findings, practical implications, and insights.     

Market Orientation and FIRMS' Environmental Innovation: The Moderating Role of Environmental Attitude

Drawing on market orientation theory, innovation theory and the theory of reasoned action, this paper integrates market orientation, environmental attitude and firms' environmental innovation into a model to establish a relationship among these three variables. By taking 247 manufacturing firms in China as the research sample and by analyzing the data using SPSS19.0, we found that customer and competitor orientation have a significant and positive impact on firms' environmental innovation, while the effect of inter‐functional coordination is not significant. Furthermore, environmental attitude plays a positive moderating role between customer orientation and firms' environmental innovation, as well as between competitor orientation and firms' environmental innovation. Finally, the results of the study are discussed, and the theoretical and practical significance of this study is clarified further. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment     

Distinctive Features of Environmental Innovators: An Econometric Analysis

This paper analyzes the main determinants influencing environmental innovators (i.e. firms developing or adopting environmental innovations) in Spain with respect to non‐environmental innovators. Similarly to other contributions in the literature, our results show that Spanish environmental innovators respond to regulatory stimulus in the form of demand‐pull and technology‐push instruments. They have a high internal technological capability and combine internal and external information sources, mostly in cooperation with knowledge institutions. Environmental innovators are more concentrated in mature, traditionally highly polluting sectors, but new firms are not more environmentally innovative than incumbents. Most importantly, in contrast to other environmental innovation studies, mostly carried out in a German context, we have not found evidence of a market pull from either the domestic or international markets. Furthermore, cost savings are not found to be a distinctive driver for environmental innovators. These differential results are possibly related to the special features of Spain regarding its national innovation system and the degree of stringency of environmental regulation and environmental consciousness of its consumers. Copyright © 2013 John Wiley & Sons, Ltd and ERP Environment.