Environmental innovation inertia: Analyzing the business circumstances for environmental process and product innovations

Abstract

We categorize the environmental innovations used in the environmental management and innovation management literature into two types: environmental process and product innovations. By using objective measurements of internal and external business circumstances from a large‐scale survey of manufacturing firms in Korea, we investigate whether firms delay adoption of specific environmental innovations and if so how to overcome the passive nature of environmental innovation activities. The main findings are as follows. Both low operational performance and high export intensity are likely to lead to environmental process innovations. On the contrary, they do not play a significant role in increasing environmental product innovations. Instead, environmental product innovations take place under normative pressure. These results contribute to the “it pays to be green” and true sustainability discussion by examining the business environmental fit of a focal firm—either with environmental process innovations or with environmental product innovations.

Turning green subsidies into sustainability: How green process innovation improves firms' green image

“…In the last few decades, a growing number of manufacturing firms have focused on green process innovation to maintain sustainable development (Li et al, ; Radu & Francoeur, ). For example, many manufacturing industries are concerned with alternative clean energy sources and recycling (Choi & Yi, ). Compared with traditional innovation, green process innovation emphasizes a firm's ability to improve its existing processes and to develop new ones, resulting in energy savings, pollution prevention, resource recycling, and increased productivity (Chiou, Chan, Lettice, & Chung, ; Huang & Li, ).…”

What Should SMEs Consider to Introduce Environmentally Innovative Products to Market?

“…As the data collected through the CIS is used as an official data source for the European Union (EU) to formulate the policies for companies' innovative activities, the KIS data is also utilized by the Korean government as a credible data source to develop the innovation-related policies for companies. Owing to such reliable features, a growing number of recent innovation-related studies have used the KIS data as a main empirical data source [9,[35][36][37][38].…”

“…No other KIS datasets, before or after, included this special section for environmental innovation activities. For this reason, the KIS 2010 is very suitable for testing the hypotheses in which several factors on environmental innovation are to be empirically tested; it was also adopted as the research data by recent studies investigating environmental innovations of Korean manufacturing companies [36,38,39]. The KIS 2010 was therefore chosen particularly for this analysis among the KIS datasets accumulated so far.…”

“…Next, the company's age was included in the analysis as elapsed years from the year of company's foundation. Third, the company's size was controlled for based on the literature that larger companies tend to be more active in environmental innovation activities [38,41] by including two variables: the number of employees and the annual sales (in millions of KRW). These two variables were all logarithm-transformed to reduce the skewness problems.…”

“…Out of 3261 companies in the sample, 216 companies were listed on either KRX or KOSDAQ (approximately 6.7%). Fifth, the number of patent applications during the observation period was included, as the patent application represents the extent to which a company is capable of technological innovation [38,42]. This variable was also logarithm-transformed to mitigate the skewness problems.…”