Eco-innovation by small and medium-sized firms in Europe: from end-of-pipe to cleaner technologies

Abstract

This paper focuses on the relevant drivers of eco-innovation in 5,135 small and medium-sized enterprises (SMEs). In particular, we study if there are differences between the determinants of end-of-pipe and adoption of cleaner technologies between small and medium firms located in 27 European countries. Using a bivariate probit, significant differences comparing small with medium firms are found. Network involvement measured by cooperation with universities and research agencies is essential in both types of eco-innovation in small firms, but not for mid-sized firms. With regard to environmental regulation, subsidies are important only for small firms, especially for the adoption of cleaner technologies. On the contrary side, existing environmental regulation is a key factor to explain the adoption of cleaner technologies for medium firms but not for smaller ones.

Keywords:

• Eco-innovation
• SMEs firms
• end-of-pipe
• cleaner technologies
• Europe

Acknowledgements

The authors would like to acknowledge the comments and suggestions made by anonymous reviewers and Guido Ferrari as Guest Editor. We also thank organizers and participants at Energy and Environment Knowledge Week (E2KW 2013) organized by the Energy and Environment Science and Technology Campus of International Excellence of the University of Castilla-La Mancha that took place on 21^st–23rd November in Toledo (Spain). The usual disclaimer applies.

Notes

1. We thank an anonymous reviewer for this remark.

2. Kemp (2000) also mentions a third category called “Other” that included environmental management systems (EMS), eco-labels, producer product responsibility, voluntary agreements, information disclosure and public procurement measures.

3. The survey explicitly includes one question related to the influence of expected future regulations to accelerate eco-innovation uptake and development for a company. Although it is possible that changes in regulation will lead firms to adopt new technologies in the future, we have not included this variable in the analysis because we believe that the effect of regulations cannot be properly picked up in a cross-section.