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Financial Constraints of Firms with Environmental Innovation

Author

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  • Febi Jensen
  • Dorothea Schäfer
  • Andreas Stephan

Abstract

Using the Mannheim Innovation Panel, we explore whether Environmental Innovator Firms (EIFs) have higher financial needs and are more financially constrained than Non-Environmental Innovator firms (OIFs). We find that EIFs are more likely to have higher latent financial need in comparison to OIFs. This implies that EIFs have latent projects that they have not yet realized, but would implement if they had the financial means to do so. EIFs adopting environmental technologies have higher financial needs compared to firms that do not. One tentative conclusion from this finding is that public subsidies might mitigate the financial restrictions of environmental innovation. Anhand des Mannheimer Innovationspanels untersuchen wir, ob Umweltinnovatoren (Environmental Innovator Firms, EIFs) einen höheren Finanzbedarf haben und finanziell stärker eingeschränkt sind als Nicht-Umweltinnovatoren (Non-Environmental Innovator Firms, OIFs). Unser empirischer Befund besagt, dass Firmen, die Umwelttechnologien einsetzen mit größerer Wahrscheinlichkeit einen latenten Finanzbedarf aufweisen, als Nicht-Umweltinnovatoren. Dies bedeutet auch, dass Umweltinnovatoren über latente Projekte verfügen, die sie noch nicht realisiert haben, die sie jedoch umsetzen würden, wenn sie die finanziellen Mittel dazu hätten. Eine vorläufige Schlussfolgerung aus diesem Befund ist, dass öffentliche Subventionen die finanziellen Beschränkungen von Umweltinnovationen mildern könnten.

Suggested Citation

  • Febi Jensen & Dorothea Schäfer & Andreas Stephan, 2019. "Financial Constraints of Firms with Environmental Innovation," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 88(3), pages 43-65.
  • Handle: RePEc:diw:diwvjh:88-3-3
    DOI: 10.3790/vjh.88.3.43
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    File URL: https://doi.org/10.3790/vjh.88.3.43
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    References listed on IDEAS

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    Cited by:

    1. Claudia Kemfert & Dorothea Schäfer & Willi Semmler, 2020. "Great Green Transition and Finance," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 55(3), pages 181-186, May.

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    More about this item

    Keywords

    Environmental innovation; innovation capability; funding gaps; financing restrictions;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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