Environmental innovation and firm performance:How firm size and motives matter

Abstract

There is limited understanding of the precise circumstances under which environmental actions-such as environmental innovation-contribute to firm performance. Building on the resource-based view and on stakeholder theory, this study argues that the general positive effect of environmental innovation on financial performance varies significantly with firm size and the motives underlying a firm's engagement in environmental innovation. Integrating survey data and lagged annual account data on 1761 Flemish companies, we find that larger firms benefit financially from environmental innovation driven by regulation or industry codes of conduct, while smaller firms benefit from environmental innovation introduced in response to customer demand. While it is increasingly accepted that environmental innovation relates positively with firm performance, the current study highlights important boundary conditions of this relationship.

Publication DOI: https://doi.org/10.3390/su11133585
Divisions: Aston Business School > Economics, Finance & Entrepreneurship
Additional Information: This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited
Uncontrolled Keywords: Environmental innovation,Firm performance,Firm size,Motives,Geography, Planning and Development,Renewable Energy, Sustainability and the Environment,Management, Monitoring, Policy and Law
Full Text Link:
Related URLs: http://www.scop ... tnerID=8YFLogxK (Scopus URL)
https://www.mdp ... 1050/11/13/3585 (Publisher URL)
PURE Output Type: Article
Published Date: 2019-06-29
Accepted Date: 2019-06-23
Authors: Andries, Petra
Stephan, Ute (ORCID Profile 0000-0003-4514-6057)

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