Regulation and Firm Perception, Eco-Innovation and Firm Performance

Justin Doran and Geraldine Ryan

MPRA Paper from University Library of Munich, Germany

Abstract: Abstract Purpose - Recent OECD (2010, 2011) reports argue that eco-innovation is the key to realising growth. The purpose of this paper is to analyse the drivers of eco-innovation and to compare the impact of eco-innovation and non-eco-innovation on firm performance. The paper provides insights into the role government regulation can play in directing and stimulating eco-innovation. Design/methodology/approach - The approach utilised by this paper is empirical in nature. A modified innovation production function is used to assess the impact of regulation, consumer expectations and voluntary agreements on the performance of eco-innovation while a knowledge augmented production function is used to assess the impact of eco-innovation on firm performance. Findings - The findings suggest that regulation and customer perception can explain a firm‟s decision to engage in eco-innovation. Eco-innovation is also found to be more important than non-eco-innovation in determining firm performance. Research limitations/implications - Due to the limited availability of accounting data this paper uses turnover per worker as the measure of firm performance. As a result it is not possible to assess the impact of eco-innovation on firm costs. Social implications - The finding that regulation drives eco-innovation and that there is no trade-off between the optimal outcomes of lower levels of pollution for society and higher profit margins for businesses suggests that regulators and policy makers can stimulate growth and create a greener society. Originality/value - This paper provides an empirical analysis of the Porter and van der Linde‟s (1995) theory of environmental regulation and firm performance using novel real world data from over 2,000 Irish businesses.

Keywords: Eco-innovation; Firm; Innovation; Ireland; Performance; Performance management; Technology (search for similar items in EconPapers)
JEL-codes: L5 O31 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (84)

Published in European Journal of Innovation Management 4.15(2012): pp. 421-441

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/44578/1/Doran_and_Ryan_%282011%29.pdf original version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:44578

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().