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Environmental innovation and firm performance : how firm size and motives matter

Tijdschriftbijdrage - Tijdschriftartikel

There is limited understanding of the precise circumstances under which environmental actionsU+2014such as environmental innovationU+2014contribute to firm performance. Building on the resource-based view and on stakeholder theory, this study argues that the general positive effect of environmental innovation on financial performance varies significantly with firm size and the motives underlying a firmU+2019s engagement in environmental innovation. Integrating survey data and lagged annual account data on 1761 Flemish companies, we find that larger firms benefit financially from environmental innovation driven by regulation or industry codes of conduct, while smaller firms benefit from environmental innovation introduced in response to customer demand. While it is increasingly accepted that environmental innovation relates positively with firm performance, the current study highlights important boundary conditions of this relationship.
Tijdschrift: Sustainability
Issue: 13
Volume: 11
Aantal pagina's: 1
Jaar van publicatie:2019