How environmental innovation influences firm performance: A meta‐analytic review

Abstract

Coupled with the increasing concern toward sustainability and sustainable development issues, environmental innovation practices have been of burgeoning interest among both scholars and practitioners. Building on this, the main purpose of this study is to quantitatively aggregate the extant empirical research on eco‐innovation and firm performance and to assess the role of moderating factors in this theoretical relationship by pursuing a meta‐analytic approach. To serve this objective, 196 effects based upon 70 studies including more than 25,000 firms (N = 25,412) were meta‐analytically examined. Quantitative evidence drawn from the meta‐analysis indicates that organizational eco‐innovation exerts the strongest influence on firm performance. Moreover, the meta‐analytic findings suggest that significant variations in the correlation between eco‐innovation and firm performance exist across different performance types, and the magnitude of the eco‐innovation–firm performance association is stronger in developing compared with developed countries. This meta‐analytic review is expected to considerably contribute to the pertinent literature by means of improving the understanding of the relevance of eco‐innovation typology to firm performance.

Sustainable Leadership in Frontier Asia Region: Managerial Discretion and Environmental Innovation

“…Furthermore, developing countries are facing resourceconstraints, in the form of low technological capability, funds, and other complex matters, so that incremental innovation is considered as highly effective for them [5]. Environmental innovation, a form of incremental innovation, introduces minor improvements in previous versions of processes, products, employing available resources [11,29]. The theory of learning economies introduces the concept of incremental innovation.…”

“…According to upper echelon theory, the impact of leadership on organizational outcomes is directly proportional to managerial discretion. Numerous studies have assessed the moderating role of managerial discretion vis-a-vis upper echelon theory [9][10][11]. Accordingly, this study investigates the moderating role of managerial discretion on the relationship of sustainable leadership with environmental innovation.…”

“…Based on Porter's competition theory, organizations expand their investment in R&D and modify production processes due to strict environmental regulations and policies that drive the advent of environmental innovation [11]. Organizations increase their environmental R&D expenditure and revamp their production processes.…”

“…In these efforts, organizations adopt environmental innovation strategies along with the enhancement of the firm's performance and environmental performance. Environmental innovation, green innovation, and ecoinnovation are synonymously used in extant studies [11,12]. Environmental innovation introduces new or improved processes, products, systems, and technologies that remove negative impacts on the environment [13,14].…”

“…Environmental innovation examines the effect of expenditures on environmental research and development (R&D), employees in the environmental sector, the environmental protection patents and the market performance of final products [14,15]. Environmental innovation improves the quality of life for everyone by using minimum natural resources and releasing minimum pollutants [11]. Accordingly, it has appeared as a vital approach to cope with environmental issues [16,17].…”