On the growth impact of different eco-innovation business strategies

Abstract

The paper investigates whether standard innovation and different types of eco-innovation activities have different effects on firm employment growth. Heterogeneity in terms of growth effects is analyzed by considering how the influence of different innovation strategies varies across firms grouped by their pace of growth. Relying on a sample of 3000 Italian manufacturing firms observed between 2012 and 2016, we find that innovative companies tend to grow faster than their non-innovative counterparts. However, when distinct paces of growth are taken into account, the employment growth impact of innovation will depend on the specific types of innovation strategies pursued by companies. In particular, more complex eco-innovation activities have no impact on employment growth for high-growth firms. This finding suggests that, on average, high-growth firms tend to be too small and too young to be able to expand through more complex EI strategies which, to be handled, require a wide range of cognitive, technological, and financial capabilities.