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Environmentally oriented innovative strategies and firm performance in services. Micro-evidence from Italy

Author

Listed:
  • Giulio Cainelli
  • Massimiliano Mazzanti
  • Roberto Zoboli

Abstract

This paper aims at analysing the impact of environmentally oriented innovative strategies on firms' economic performance in terms of employment, turnover and labour productivity growth. We exploit a unique dataset of 773 Italian service firms with 20 or more employees, based on 1993-1995 Community Innovation Survey (CIS) II data on innovation strategies and 1995-1998 System of the Enterprise Account (SEA). Using a Gibrat-like empirical model, our findings show a negative link between environmental motivations and growth in employment and turnover in the short term, which then associates to a not significant or even negative effect on labour productivity growth, a result which is explainable by various factors: non-mature markets; early movers that need more time to grasp the benefits of innovative actions; weaknesses of some service branches. The effect on employment is in part compatible with the existing evidence and may be based on efficiency improvements (dematerialisation processes), which also impact on efficiency by reducing workforce numbers. The effect on turnover of environmental innovation strategy is negative, implying either a short-medium effect, possibly balanced in the long run by net benefits in terms of higher added value, or a real negative impact, which may be contingent on the period of observation, when environmental strategies where not at the heart of strategic management policies. Neither Porter-like effects nor virtuous circles among environmentally strategies and performance seem to be present, at least in the short run and for services firms, calling for the necessity of further analyses on medium- long-term effects and performances of specific service branches. Though effects on performances could turn out positive in the long run when mature green markets and investments provide their benefits, our evidence highlights that services could still find hard times in tackling the well-known low productivity 'disease' even in the environmental realm.

Suggested Citation

  • Giulio Cainelli & Massimiliano Mazzanti & Roberto Zoboli, 2011. "Environmentally oriented innovative strategies and firm performance in services. Micro-evidence from Italy," International Review of Applied Economics, Taylor & Francis Journals, vol. 25(1), pages 61-85.
  • Handle: RePEc:taf:irapec:v:25:y:2011:i:1:p:61-85
    DOI: 10.1080/02692170903426146
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    References listed on IDEAS

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    1. Wayne B Gray & Ronald J Shadbegian, 1994. "Pollution Abatement Costs, Regulation And Plant-Level Productivity," Working Papers 94-14, Center for Economic Studies, U.S. Census Bureau.
    2. Raquel Ortega-Argilés & Lesley Potters & Marco Vivarelli, 2011. "R&D and productivity: testing sectoral peculiarities using micro data," Empirical Economics, Springer, vol. 41(3), pages 817-839, December.
    3. Michael Greenstone, 2001. "The Impacts of Environmental Regulations on Industrial Activity: Evidence from the 1970 & 1977 Clean Air Act Amendments and the Census of Manufactures," NBER Working Papers 8484, National Bureau of Economic Research, Inc.
    4. Nick Johnstone (ed.), 2007. "Environmental Policy and Corporate Behaviour," Books, Edward Elgar Publishing, number 12551.
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    Citations

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    Cited by:

    1. Peñasco, Cristina & del Río, Pablo & Romero-Jordán, Desiderio, 2017. "Analysing the Role of International Drivers for Eco-innovators," Journal of International Management, Elsevier, vol. 23(1), pages 56-71.
    2. Massimiliano Mazzanti & Giulio Cainelli & Roberto Zoboli, 2008. "The Relationship Between Environmental Efficiency and Manufacturing Firm’s Growth," Working Papers 2008.99, Fondazione Eni Enrico Mattei.
    3. Fabio Montobbio & Ilaria Solito, 2015. "Does EMAS foster innovation in European firms? An empirical investigation," SEEDS Working Papers 1615, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Sep 2015.
    4. Zornitsa Stoyanova & Hristina Harizanova, 2017. "Analysis of the External Environment of Green Jobs in Bulgaria," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 1, pages 122-136, March.
    5. Doran, Justin & Ryan, Geraldine, 2012. "Regulation and Firm Perception, Eco-Innovation and Firm Performance," MPRA Paper 44578, University Library of Munich, Germany.
    6. repec:eee:resene:v:49:y:2017:i:c:p:86-98 is not listed on IDEAS
    7. Lucia Crevani & Kristina Palm & Annika Schilling, 2011. "Innovation management in service firms: a research agenda," Service Business, Springer;Pan-Pacific Business Association, vol. 5(2), pages 177-193, June.
    8. Consoli, Davide & Marin, Giovanni & Marzucchi, Alberto & Vona, Francesco, 2016. "Do green jobs differ from non-green jobs in terms of skills and human capital?," Research Policy, Elsevier, vol. 45(5), pages 1046-1060.
    9. Davide Antonioli & Massimiliano Mazzanti, 2009. "Techno-organisational strategies, environmental innovations and economic performances. Micro-evidence from an SME-based industrial district," Journal of Innovation Economics, De Boeck Université, vol. 0(1), pages 145-168.
    10. Antonietti, Roberto & Marzucchi, Alberto, 2014. "Green tangible investment strategies and export performance: A firm-level investigation," Ecological Economics, Elsevier, vol. 108(C), pages 150-161.
    11. Davide Antonioli & Simone Borghesi & Massimiliano Mazzanti, 2014. "Are Regional Systems Greening the Economy? the Role of Environmental Innovations and Agglomeration Forces," Working Papers 2014.42, Fondazione Eni Enrico Mattei.
    12. Cainelli, Giulio & Mazzanti, Massimiliano, 2013. "Environmental innovations in services: Manufacturing–services integration and policy transmissions," Research Policy, Elsevier, vol. 42(9), pages 1595-1604.
    13. Kruse, Juergen, 2016. "Innovation in Green Energy Technologies and the Economic Performance of Firms," EWI Working Papers 2016-2, Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI).
    14. Giulio Cainelli & Massimiliano Mazzanti & Roberto Zoboli, 2011. "Enviromental Innovations, Complementarity and Local/Global Cooperation," Working Papers 201104, University of Ferrara, Department of Economics.
    15. Massimiliano Mazzanti & Roberto Zoboli, 2009. "Embedding environmental innovation in local production systems: SME strategies, networking and industrial relations: evidence on innovation drivers in industrial districts," International Review of Applied Economics, Taylor & Francis Journals, vol. 23(2), pages 169-195.

    More about this item

    Keywords

    services; firm environmental strategies; firm growth; CIS survey; innovation;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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