Eco-innovation in Waste Recycling Industry in Ghana: Modeling the Upper Echelon Behavioral Drivers of Grass Root Innovation Among SEED Award Winners

Abstract

Although recent, eco-innovations are increasingly adopted by businesses of all sizes including SMEs in the recycling industry. However, as compared to well-known barriers and obstacles to eco-innovate that are unique to recycling industry, the drivers or determinants are rarely explored. The focus of this study is to investigate socio-psychological drivers of eco-innovation through the combine lens of the upper echelon theory (UET), and firms internal/external factors. The empirical study was based on data obtained from 200 waste recycling entrepreneurs’ founders and co-founders in Ghana who were winner of supporting entrepreneurs for environment and development (SEED) Award from 2010 to 2019. With the implementation of a regression analysis technique, the estimation effects of multiple variables on eco-innovation was made possible. The results confirm the positive effect of regulation and market opportunity on the environmental innovation of SMEs along with two other determinants that are essential for promoting eco-innovation in the startup including; (1) top executive’s self-efficacy, level of education, and experience that reflect the socio-psychological cognitive base toward pro-environmental behavior and (2) the firm’s sustainability identity. The study is first to focus on the subjective drivers perceived by SMEs top executive in waste recycling to eco-innovation and to reveal their specificities compared to other industries. Therefore, these findings can serve as a basis for identifying individual-level characteristics crucial in supporting eco-innovation performance in the waste recycling sector.