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Financial constraints and public funding for eco-innovation: Empirical evidence on European SMEs

Author

Listed:
  • Grazia Cecere
  • Nicoletta Corrocher
  • Maria Luisa Mancusi

    () (Università Cattolica del Sacro Cuore
    Dipartimento di Economia e Finanza, Università Cattolica del Sacro Cuore)

Abstract

Financial constraints have an important impact on the development of eco-innovations, but their effect varies according to the type of funds taken into account. This article studies the impact of the lack of funds on the development of eco-innovations, distinguishing between internal, external and public funds. In particular, we investigate the interaction between public funding, on the one hand, and internal and other external sources of funding. The empirical analysis is based upon a sample of European SMEs belonging to different sectors that are involved in products, processes and organizational eco-innovations. Our results show that a lack of internal funding always decreases the probability to introduce eco-innovations, while the lack of private external funds does not appear to hinder the development of eco-innovations. Interestingly, we find that access to public funds or incentives is effective in improving a firm’s ability to introduce eco-innovations, but only when the firm is not short of funds (either from internal or external sources), thus suggesting that public funds are somewhat complementary to other funds. Further analysis shows that these effects are mostly relevant in small firms.

Suggested Citation

  • Grazia Cecere & Nicoletta Corrocher & Maria Luisa Mancusi, 2016. "Financial constraints and public funding for eco-innovation: Empirical evidence on European SMEs," DISCE - Working Papers del Dipartimento di Economia e Finanza def046, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
  • Handle: RePEc:ctc:serie1:def046
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    File URL: http://dipartimenti.unicatt.it/economia-finanza-def046.pdf
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    Cited by:

    1. Elenka Brenna & Lara Gitto, 2016. "Financing elderly care in Italy and Europe. Is there a common vision?," DISCE - Working Papers del Dipartimento di Economia e Finanza def047, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    2. Rosario Crinò & Giovanni Immordino & Salvatore Piccolo, 2018. "Fighting Mobile Crime," DISCE - Working Papers del Dipartimento di Economia e Finanza def071, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
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    7. Russell Davidson & Andrea Monticini, 2018. "Improvements in Bootstrap Inference," DISCE - Working Papers del Dipartimento di Economia e Finanza def070, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    8. Elenka Brenna & Lara Gitto, 2018. "Adult education, the use of Information and Communication Technologies and the impact on quality of life: a case study," DISCE - Working Papers del Dipartimento di Economia e Finanza def073, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).

    More about this item

    Keywords

    eco-innovations; public funding; financial constraints; SMEs.;

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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