Green innovation and financial performance: A study on Italian firms

Abstract

As the environmental agenda gains momentum all over the world, enterprises face the challenge of combining economic and environmental goals. An obvious, recurrent, and yet not fully answered question is whether, and under which circumstances, an improvement in a firm's environmental performance leads to higher profits. Looking at innovation data, the present study, addresses the question whether Environmental Innovation (EI) is synergic with other types of innovation. To this aim, we separately consider the competitive gains from efficiency increases and cost savings due to different types of environmental innovations (EI) affecting the supply and the demand sides of a firm's activity. Using the Italian CIS dataset (2006–2008), we identify synergic interactions between EI and some but not all other types of innovation.