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Removing environmental market failure through support mechanisms: insights from green start-ups in the British, French and German energy sectors

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  • Christopher Ball

    (Institute of Energy and Climate Research, Systems Analysis and Technology Evaluation (IEK-STE))

  • Markus Kittler

    (MCI Management Center Innsbruck, Internationale Hochschule)

Abstract

Environmentally relevant market failure, related to the lack of value attached to environmentally beneficial economic activity, constrains environmental entrepreneurship as reported by Dean and McMullen (Journal of Business Venturing, 22, 50–76, 2007) . Unless this market failure is addressed, green start-ups will be confined to a “green prison” as stated in Pacheco et al. (Sustainable Development and Entrepreneurship, 25, 464–480, 2010), unable to grow and disseminate their eco-innovations out with environmental niche markets. In Britain, France and Germany, support mechanisms promote the expansion of renewable power technologies. This paper examines environmental entrepreneurs’ perceptions of the importance and effectiveness of support mechanisms in removing environmental market failure in the energy sectors of these three countries. Our findings suggest that these support mechanisms are perceived by entrepreneurs as having provided a crucial pecuniary motivation among consumers to adopt eco-innovation, creating greater market certainty for green start-ups. However, when these support mechanisms are reformed, aiming at greater market integration for eco-innovation, green start-ups find this transition from protection to more market exposure as challenging and more suited for incumbent firms.

Suggested Citation

  • Christopher Ball & Markus Kittler, 2019. "Removing environmental market failure through support mechanisms: insights from green start-ups in the British, French and German energy sectors," Small Business Economics, Springer, vol. 52(4), pages 831-844, April.
    • Handle: RePEc:kap:sbusec:v:52:y:2019:i:4:d:10.1007_s11187-017-9937-8
    DOI: 10.1007/s11187-017-9937-8
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    3. Gao, Xue, 2021. "The comparative impact of solar policies on entrepreneurship in the U.S. solar photovoltaic installation industry," Energy Policy, Elsevier, vol. 156(C).
    4. Hong Chen & Haowen Zhu & Tianchen Sun & Xiangyu Chen & Tao Wang & Wenhong Li, 2023. "Does Environmental Regulation Promote Corporate Green Innovation? Empirical Evidence from Chinese Carbon Capture Companies," Sustainability, MDPI, vol. 15(2), pages 1-24, January.
    5. Eghbali, Mohammad-Ali & Rasti-Barzoki, Morteza & Safarzadeh, Soroush, 2022. "A hybrid evolutionary game-theoretic and system dynamics approach for analysis of implementation strategies of green technological innovation under government intervention," Technology in Society, Elsevier, vol. 70(C).
    6. Aswathy Sreenivasan & M. Suresh, 2023. "Green Start-ups: Start-ups Accelerating Sustainability," International Journal of Global Business and Competitiveness, Springer, vol. 18(1), pages 80-89, June.
    7. Binbin Cai & Yin Chen & Arslan Ayub, 2023. "“Quiet the Mind, and the Soul Will Speak”! Exploring the Boundary Effects of Green Mindfulness and Spiritual Intelligence on University Students’ Green Entrepreneurial Intention–Behavior Link," Sustainability, MDPI, vol. 15(5), pages 1-21, February.
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    9. Yang, Qi-Cheng & Zheng, Mingbo & Chang, Chun-Ping, 2022. "Energy policy and green innovation: A quantile investigation into renewable energy," Renewable Energy, Elsevier, vol. 189(C), pages 1166-1175.
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