Eco-innovation capability and sustainability driven innovation practices in Romanian SMEs

Abstract

This study examines the influence of eco-innovation capability on sustainability driven innovation practices in SMEs. In this study, eco-innovation capability is represented by four factors-internal setting, strategies, operations and structure-while sustainability driven innovation practices are represented by three types of practices-process, organizational and product. The direct relationship between eco-innovation capability and sustainability driven innovation practices is statistically tested by using a sample of 397 Romanian manufacturing small and medium-sized enterprises using PLS-SEM and SmartPLS software. The results show that the development of eco-innovation capability has a direct and positive effect on sustainability driven innovation practices employed in manufacturing SMEs by encouraging them to get involved in cleaner production practices, waste handling and recycling on a regular basis or integrate eco-efficiency into their operations, develop new channels for sustainable products or integrate customers' suggestions or complaints, implement environment management systems, use eco-friendly raw materials or focus on new product development, for instance. Therefore, the paper extends the literature dedicated to eco-innovation by shedding some light on what to focus on when building eco-innovation capability.