The Link between Sustainable Innovation and Industrial Performance: The Case of the United States

Abstract

Notwithstanding the impact of sustainable innovation on environmental management, its bearing on industrial performance remains hypothetical. Our study seeks to empirically investigate the link between sustainable innovation and industry performance in the United States by employing the generalized method of moments on a nine-year panel spanning from 2014 to 2022. The sample consists of 94 U.S industries, which covers about 7300 companies. The results show that sustainable innovation is not significantly related to industrial performance in the United States. However, it has a moderating effect on industrial output. The Arellano–Bond test, AR (2), confirms the robustness of our findings given the endogeneity assumption and model specifications, and the Hansen test confirms the validity of the instruments. This study expands our knowledge of the link between sustainable innovation and industry performance. A study of this kind is relevant in current times as the United States seeks to attain Sustainable Development Goal 9 by 2030. Further, it provides theoretical guidance on successful environmental management practices to enhance social welfare and maximize output.