Determining Factors of Eco-innovation Adoption: An Empirical Study of Micro- and Small Enterprises in Johannesburg, South Africa

Abstract

Eco-innovation (EI) is a typical innovation that is beneficial to the environment. It is seen as a necessary step that positively contributes to the worldwide fight against carbon emissions. It is a crucial component for achieving sustainable development, and improving environmental and economic performance. This study investigates what drives micro- and small enterprises (MSEs) to adopt environmental innovation technologies in Johannesburg, South Africa. An econometric model is used in the study to examine a total of 1,021 MSEs. The probit findings show that environmental tax, government subsidies, and research and development activities have a positive influence on EI adoption. Also, adoption of EI is dependent on the successful application of non-EIs (e.g., innovation on new products, innovation on improved products and innovation on improved services) by enterprises. The article concludes with policy implications.