Friends or foes? A systematic literature review and meta-analysis of the relationship between eco-innovation and firm performance

Abstract

Eco-innovation has gained currency as an effective means of addressing corporate environmental impacts. Yet the literature is inconclusive as to how different types of eco-innovation influence different types of firm performance. This is problematic, as practitioners and policymakers will not embrace eco-innovation unless there is clear evidence that through its implementation companies can achieve returns, not only on their environmental performance but also on their economic, social and operational performance. This paper aims to improve our understanding of this relationship by conducting a meta-analysis and drawing on a much broader sample than previous meta-analytic efforts in this field. The paper analyses 569 effects based on 160 studies and more than 124,000 firms ((Formula presented.)). Our results provide solid evidence of the positive impact eco-innovation has on all types of firm performance but also highlight types of eco-innovation that do not contribute to this relationship and the role moderators play in explaining discrepancies found in the literature.