Do European firms obey the rules? Environmental innovativeness in light of institutional frameworks

Abstract

In light of increasing ecological issues, the deployment of environmentally friendly technologies is of major importance. This paper examines how institutions can influence firm behaviour with respect to introducing environmental innovations. Based on institutional and innovation theory, we explore the relationship of institutional factors with two highly relevant and heterogeneous types of environmental innovation, namely: the reduction of material use (Ecomat) and the reduction of carbon dioxide emissions (Ecoco). We utilise the 2008 and 2014 survey waves of the Community Innovation Survey (CIS). This allows us to explore two separate cross-sectional samples at different points of time. Each sample is drawn from twelve European Union countries, giving us a total of about 70,000 firms. We find that formal institutions more strongly influence Ecoco innovation, especially for the CIS 2014 sample. We find that informal institutions affect both innovation types similarly.

CEO educational attainment, green innovation, and enterprise performance: Evidence from China’s heavy-polluting enterprises

“…Institutional heterogeneity has significantly positive effects on green innovation, which is in line with the previous literature (Lubacha and Wendler, 2021;Wang F. et al, 2022). When enterprises face the pressure of environmental regulation, they will weigh up the cost of environmental punishment and the benefits of green innovation.…”