Today, firms are faced with a number of environmental challenges, such as global warming, pollution control and declining natural resources. While there is increasing pressure to deliver environmentally friendly products and services, little is known about what drives the many different types of environmental innovation, or how such pursuits' impact firm performance. Using a sample of 2181 firms, this paper examines the factors that drive nine different types of eco-innovation in Ireland, and assesses how such innovations impact firm performance. We find that, while demand-side, supply-side and regulatory drivers impact on the likelihood of a firm engaging in eco-innovation, the relative magnitudes of these impacts vary across the types of eco-innovation considered. Moreover, we find that only two of the nine types of eco-innovation positively impact firm performance. The results point to regulation and customer pressure as viable mechanisms through which firms can be encouraged to ecoinnovate.

Purpose -Recent OECD (2010, 2011) reports argue that eco-innovation is the key to realising growth. The purpose of this paper is to analyse the drivers of eco-innovation and to compare the impact of eco-innovation and non-eco-innovation on firm performance. The paper provides insights into the role government regulation can play in directing and stimulating eco-innovation. Design/methodology/approach -The approach utilised by this paper is empirical in nature. A modified innovation production function is used to assess the impact of regulation, consumer expectations and voluntary agreements on the performance of eco-innovation while a knowledge augmented production function is used to assess the impact of eco-innovation on firm performance. Findings -The findings suggest that regulation and customer perception can explain a firm"s decision to engage in eco-innovation. Eco-innovation is also found to be more important than non-eco-innovation in determining firm performance. Research limitations/implications -Due to the limited availability of accounting data this paper uses turnover per worker as the measure of firm performance. As a result it is not possible to assess the impact of eco-innovation on firm costs. Social implications -The finding that regulation drives eco-innovation and that there is no trade-off between the optimal outcomes of lower levels of pollution for society and higher profit margins for businesses suggests that regulators and policy makers can stimulate growth and create a greener society. Originality/value -This paper provides an empirical analysis of the Porter and van der Linde"s (1995) theory of environmental regulation and firm performance using novel real world data from over 2,000 Irish businesses.

Type of publicationArticle (peer-reviewed)Link to publisher's version http://dx

This paper analyses the impact of stimulating staff creativity and idea generation on the likelihood of innovation. Using data for over 3,000 firms, obtained from the Irish Community Innovation Survey 2008-2010, we examine the impact of six creativity generating stimuli on product, process, organisational and marketing innovation. Our results indicate that the stimuli impact the four forms of innovation in different ways. For instance, brainstorming and multidisciplinary teams are found to stimulate all forms of innovation, rotation of employees is found to stimulate organisational innovation, while financial and non-financial incentives are found to have no effect on any form of innovation. We also find that the co-introduction of two or more stimuli increases the likelihood of innovation more than implementing stimuli in isolation. These results have important implications for management decisions in that they suggest that firms should target their creative efforts towards specific innovation outcomes. We consider four types of innovation: product, process, organisational and marketing. The Oslo Manual notes that these forms of innovation are a mixture of technical and non-technical innovation which may have different determinants (OECD, 2005). Indeed in the context of R&D, Doran et al. (2013) note that different forms of R&D have diverse impacts on the likelihood of performing different forms of innovation. Therefore, it is possible that our idea generation and creativity stimuli may have a differentiated impact on innovation types. We assess the importance of our stimuli on as wide a spectrum of innovation types as our data facilitate to ascertain whether there are any commonalities or substantive differences in their effectiveness. The remainder of this paper is structured as follows. Section 2 presents a review of the literature. The data and methods are presented in Section 3. The results are set out in Section 4, while Section 5 discusses these results. Section 6 concludes our study. LITERATURE REVIEWInnovation is the key to maintaining competitiveness in the global market. The capability of a firm to develop new goods and services, to transform its structure into a more efficient one and to make its marketing more competitive determines its success. Since idea generation and creativity are fundamental to innovation, firm owners and managers frequently encourage, stimulate, fund and reward such activities (Hansen and Birkinshaw, 2007;OECD, 2005;Roper et al., 2008). We begin this section by examining what is meant by idea generation and creativity stimuli, and how these concepts are linked to innovation. Following this we examine the Componential Theory of Creativity (Amabile, 1988(Amabile, , 1996Amabile and Mueller, 2008) and use it to identify stimuli that may enhance organisational creativity. Linking idea generation, creativity and innovationSince the concepts of idea generation, creativity and innovation are used interchangeably in the literature (Ford, 1996;Shalley et al., 2004), it is imp...

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