Green R&D for eco-innovation and its impact on carbon emissions and firm performance

Abstract

Keywords:Green research and development (R&D) Eco-innovation Resource-based view Natural resource-based view Carbon emissions Firm performance a b s t r a c t Over the past four decades, the results of the debates about the relationship between corporate environmental performance and corporate financial performance have remained inconclusive, due to the lack of theoretical underpinning and availability of data. This paper examines the impact of green research and development investment for eco-innovation on environmental and financial performance. The research is based on the resource-based view and the natural resource-based view, which explicitly recognize the importance of resources and capabilities. Using a sample of Japanese manufacturing firms during the period of 2001e2010, the study focuses on green research and development investment as a key proxy of eco-innovation and carbon emissions in environmental performance. Our results show the presence of a negative relationship between green research and development and carbon emissions, while green research and development is positively related to financial performance at the firm level. Our findings explicitly support that, in order for firms to adopt a proactive environmental strategy to manage their environmental and financial performance to the best advantage, they urgently need to organise unique resources and capabilities. The findings of this study provide valuable insights and basis of scientific debate on how firms to engage unique organizational resources and capabilities for superior corporate environmental and financial performance.

Short-term versus long-term benefits: Balanced sustainability framework and research propositions

“…Although sustainability research is growing rapidly in different research fields, there is a lack of a strong theoretical base for such research in strategic and operations management. Researchers either rely on the RBV and NRBV to rationalize firms' adoption of sustainable strategies from a single environmental or social perspective (Lee and Min, 2015), or take a more reactive approach to explain firms' movement toward sustainability from a stakeholder or institutional perspective (Sarkis, Zhu and Lai, 2011;Adebambo et al, 2013). Bansal (2005), among the earliest, attempts to combine the RBV and the institutional theory to explain firms' sustainable development.…”

“…Each has a different environmental driving force and is associated with a particular competitive advantage. In general, the NRBV specifies the links between corporate green strategies, green capabilities, and competitive advantage at a firm level, which requires firms to take a long-term, instead of a short-term, focus on immediate profit only to accumulate resources and manage capabilities in making strategic decisions (Lee and Min, 2015).…”

Impacts of Low-Carbon Innovation and Its Heterogeneous Components on CO2 Emissions

“…For example, Lee & Min [4] defined EP as carbon emissions, Ghisetti & Quatraro [5] defined EP as the ratio between real value added and CO 2 emissions, Picazo-Tadeo et al [6] defined EP as an environmental productivity index based on Data Envelopment Analysis (DEA). Generally, there are at least three frameworks for investigating the influential factors of EP.…”

“…They carried out an Italian cross-sectoral analysis and found such vertical linkage could introduce demand for EI and hence positively influence EP (e.g., value added/CO 2 emission). Using a sample of Japanese manufacturing firms from 2001 to 2010, Lee & Min [4] found a significant and negative relationship between firm-level environmental R&D investment and CO 2 emissions.…”

“…For example, Lee & Min [4] differentiated environmental R&D and non-environmental R&D. Wang et al [28] carried out an empirical study using panel data of 30 Chinese provinces from 1997 to 2008, and found that impacts of fossil-fueled and carbon-free energy technology on CO 2 emissions were different. Costantini et al [2] subdivided EI into seven classes (e.g., renewable, transport, etc.)…”