The eco-innovation impact on economic and environmental performance of EU Member States
Abstract
Development of innovation is recognised as a most powerful tool for the economic growth of countries. However, their effects on the quality of the environment are still being debated. To achieve sustainable development, eco-innovation becomes significant. EU countries expand eco-innovation activities, but it is not clear whether its development achieves the goal of economic growth and improves the quality of the environment.
Purpose – to present how EU Member States perform in economic growth, environment and eco-innovation development and to evaluate eco-innovations impact on economic and environmental performance.
Research methodology – the random effect regression was used for investigation relationship between eco-innovation, economic growth and environmental performance.
Findings – eco-innovation development influences not only EU MS economic growth but also has a positive effect on environmental performance.
Research limitations – eco-innovations development and economic growth can be interdepended, but this research investigates just one-way dependence. Granger causality test can be used for relationship assessment in the future.
Practical implications – the research results can be used for both the development of environmental policy and the policy of business support for eco-innovation implementation.
Originality/Value – study results confirmed previous assessment results on eco-innovation and economic growth and provided new knowledge of their effect on environmental performance.
Keyword : innovations, eco-innovations, economic growth, environment, Eco-Innovation Index, Environmental Performance Index
How to Cite
Mačiulytė-Šniukienė, A., & Sekhniashvili, D. (2021). The eco-innovation impact on economic and environmental performance of EU Member States. Business, Management and Economics Engineering, 19(2), 212-228. https://doi.org/10.3846/bmee.2021.14497
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
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Costantini, V., Crespi, F., Marin, G., & Paglialunga, E. (2017). Eco innovation, sustainable supply chains and environmental performance in European industries. Journal of Cleaner Production, 155(2), 141–154. https://doi.org/10.1016/j.jclepro.2016.09.038
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Freimane, R., & Bāliņa, S. (2016). Research and development expenditure and economic growth in the EU: A panel data analysis. Economics and Business, 29(1), 5–10. https://doi.org/10.1515/eb-2016-0016
Fussler, C., & James, P. (1996). Driving eco-innovation: A breakthrough discipline for innovation and sustainability. Pitman Publishing.
Hojnik, J., & Ruzzier, M. (2016). What drives eco-innovation? A review of an emerging literature. Environmental Innovation and Societal Transitions, 19, 31–41. https://doi.org/10.1016/j.eist.2015.09.006
Hojnik, J., Ruzzier, M., & Manolova, T. (2018). Internationalisation and economic performance: The mediating role of eco-innovation. Journal of Cleaner Production, 171, 1312–1323. https://doi.org/10.1016/j.jclepro.2017.10.111
Horbach, J., Rammer, C., & Rennings, K. (2012). Determinants of eco-innovations by type of environmental impact – The role of regulatory push/pull, technology push and market pull. Ecological Economics, 78, 112–122. https://doi.org/10.1016/j.ecolecon.2012.04.005
Jang, E. K., Park, M. S., Roh, T. W., & Han, K. J. (2015). Policy instruments for eco-innovation in Asian countries. Sustainability, 7(9), 12586–12614. https://doi.org/10.3390/su70912586
Jian, J., Fan, X., Zhao, S., & Zhou, D. (2021). Business creation, innovation, and economic growth: Evidence from China’s economic transition, 1978–2017. Economic Modelling, 96, 371–378. https://doi.org/10.1016/j.econmod.2020.03.019
Kemp, R., & Mainguy, G. (2011). Ten themes for eco-innovation policies in Europe. Surveys and Perspectives Integrating Environment and Society, 4(2), 1–20. https://journals.openedition.org/sapiens/1169
Kemp, R., & Pearson, P. (2008). Final report MEI project about measuring eco innovation. https://www.oecd.org/env/consumption-innovation/43960830.pdf
Kiefer, C. P., Carrillo-Hermosilla, J., Del Rio, P., & Callealta Barroso, F. J. (2017). Diversity of ecoinnovations: A quantitative approach. Journal of Cleaner Production, 166, 1494–1506. https://doi.org/10.1016/j.jclepro.2017.07.241
King, A. A., & Lenox, M. J. (2001). Does it really pay to be green? An empirical study of firm environmental and financial performance. Journal of Industrial Ecology, 5(1), 105–116. https://doi.org/10.1162/108819801753358526
Lesakova, L., & Laco, P. (2020). Using the eco-innovation index to assess the eco-innovation performance: Case of Slovakia. Journal of Innovation & Business Best Practice, 2020, 347837, 1–11. https://doi.org/10.5171/2020.347837
Lopes Santos, D. F., Valente Rezende, M. D., & Cruz Basso, L. F. (2019). Eco-innovation and business performance in emerging and developed economies. Journal of Cleaner Production, 237, 117674. https://doi.org/10.1016/j.jclepro.2019.117674
Loučanová, E., & Nosáľová, M. (2020). Eco-innovation performance in Slovakia: Assessment based on ABC analysis of eco-innovation indicators. BioResources, 15(3), 5355–5365.
Mačiulytė-Šniukienė, A., & Davidavičienė, V. (2020, October 2). The impact of financial openness on eu member states productivity. In New challenges in economic and business development – 2020: Economic inequality and well-being: 12th international scientific conference proceedings (pp. 234–245). University of Latvia.
Musah, S., Gakpetor, E. D., Kyei, S. N. K., & Akomeah, E. (2018). Foreign Direct Investment (FDI), economic growth and bank performance in Ghana. International Journal of Finance and Accounting, 7(4), 97–107.
Nishitani, K., Jannah, N., Kaneko, S., & Hardinsyah. (2017). Does corporate environ-mental performance enhance financial performance? An empirical study of Indonesian firms. Environmental Development, 23, 10–21. https://doi.org/10.1016/j.envdev.2017.06.003
Oltra, V., & Saint Jean, M. (2009). Sectoral systems of environmental innovation: An application to the French automotive industry. Technological Forecasting and Social Change, 76(4), 567–583. https://doi.org/10.1016/j.techfore.2008.03.025
Organisation for Economic Co-operation and Development. (2018). Oslo manual. Guidelines for collecting, reporting and using data on innovation (4th ed.). https://www.oecd.org/science/oslo-manual-2018-9789264304604-en.htm
Pansera, M., & Owen, R. (2018). Innovation for de-growth: A case study of counter-hegemonic practice from Kerala, India. Journal of Cleaner Production, 197(Part 2), 1872–1883. https://doi.org/10.1016/j.jclepro.2016.06.197
Porter, M., & Van der Linde, C. (1995). Green and competitive: Ending the stalemate sustainability. https://hbr.org/1995/09/green-and-competitive-ending-the-stalemate
Rabadán, A., González-Moreno, Á., & Sáez-Martínez, F. J. (2019). Improving firms’ performance and sustainability: The case of eco-innovation in the agri-food industry. Sustainability, 11(20), 5590. https://doi.org/10.3390/su11205590
Reid, A., & Miedzinski, M. (2008). Eco-innovation. Final report for sectoral innovation watch (Systematic Eco-Innovation Report, pp. 1–3). Technopolis Group.
Rennings, K., Ziegler, A., Ankele, K., & Hoffmann, E. (2006). The influence of different characteristics of the eu environmental management and auditing scheme on technical environmental innovations and economic performance. Ecological Economics, 57(1), 45–59. https://doi.org/10.1016/j.ecolecon.2005.03.013
Rizos, V., Behrens, A., & Taranic, I. (2015). Measuring progress in eco-innovation. NETGREEN Policy Brief No. 1. www.ceps.eu
Roscoe, S., Cousins P., & Lamming, R. C. (2016). Developing eco-innovations: A three-stage typology of supply networks. Journal of Cleaner Production, 112(3), 1948–1959. https://doi.org/10.1016/j.jclepro.2015.06.125
Santos, D. F. L., Lima, M. M., Basso, L. F. C., Kimura, H., & Sobreiro, V. A. (2017). Eco-innovation and financial performance at companies established in Brazil. International Journal of Business and Emerging Markets, 9(1), 68–89. https://doi.org/10.1504/IJBEM.2017.080783
Schiederig, T., Tietzer, F., & Herstatt, C. (2012). Green innovation in technology and innovation management – an exploratory literature review. R&D Management, 42(2), 180–192. https://doi.org/10.1111/j.1467-9310.2011.00672.x
Socioeconomic Data and Applications Center. (2020). Environmental Performance Index (EPI). https://sedac.ciesin.columbia.edu/data/collection/epi/sets/browse
Tamayo-Orbegozo, U., Vicente-Molina, M. A., & Villarreal-Larrinaga, O. (2017). Eco-innovation strategic model. A multiple-case study from a highly eco-innovative European region. Journal of Cleaner Production, 142(4), 134–1367. https://doi.org/10.1016/j.jclepro.2016.11.174
Triguero, A., Moreno-Mondéjar, L., & Davia, M. A. (2013). Drivers of different types of eco-innovation in European SMEs. Ecological Economics, 92, 25–33. https://doi.org/10.1016/j.ecolecon.2013.04.009
United Nations Environmental Programme. (2014). The business case for eco-innovation. Retrieved December, 22, 2020, from https://wedocs.unep.org/handle/20.500.11822/10613
Vargas-Vargas, M., Meseguer-Santamaría, M. L., Mondéjar-Jiménez, J., & Mondéjar-Jiménez, J. A. (2010). Environmental protection expenditure for companies: A Spanish regional analysis. International Journal of Environmental Research, 4(3), 373–378.
Wendling, Z. A., Emerson, J. W., de Sherbinin, A., & Esty, D. C. (2020). 2020 Environmental performance index. Yale Center for Environmental Law & Policy, New Haven, CT.
Wielgórka, D., & Szczepaniak, W. (2019). Eco-innovation of enterprises operating in Poland against the background of EU countries. Global Journal of Environmental Science and Management, 5(SI), 113–121.
Yale Center for Environmental Law and Policy. (2020). Environmental performance index. https://epi.yale.edu/
Yurdakul, M., & Kazan, H. (2020). Effects of eco-innovation on economic and environmental performance: Evidence from Turkey’s manufacturing companies. Sustainability, 12(8), 3167. https://doi.org/10.3390/su12083167
Zeng, S. X., Meng, X. H., Zeng, R. C., Tam, C. M., Tam, V. W. Y., & Jin, T. (2011). How environmental management driving forces affect environmental and economic performance of SMEs: A study in the Northern China district. Journal of Cleaner Production, 19(13), 1426–1437. https://doi.org/10.1016/j.jclepro.2011.05.002
Zhang, D., & Rong, Z. J. Q. (2014). Green innovation and firm performance: Evidence from listed companies in China resource. Journal of Cleaner Production, 64(1), 81–90.
Andriušaitienė, D. (2020). Vocation guidance – GPS for management of human resource development: Does it work in Lithuania. Business, Management and Education, 18(1), 56–72. https://doi.org/10.3846/bme.2020.11937
Bartoszczuk, P. A. (2015). Eco innovations in European countries. In Proceedings of EnviroInfo and ICT for Sustainability 2015 (pp. 19–25). Atlantis Press. https://doi.org/10.2991/ict4s-env-15.2015.3
Cai, W., & Guangpei, L. (2018). The drivers of eco-innovation and its impact on performance: Evidence from China. Journal of Cleaner Production, 176(1), 110–118. https://doi.org/10.1016/j.jclepro.2017.12.109
Cheng, C. C., Yang, C., & Sheu, C. (2014). The link between eco-innovation and business performance: a Taiwanese industry context. Journal of Cleaner Production, 64(1), 81–90. https://doi.org/10.1016/j.jclepro.2013.09.050
Cicea, C., & Marinescu, C. (2021). Bibliometric analysis of foreign direct investment and economic growth relationship. A research agenda. Journal of Business Economics and Management, 22(2), 445–466. https://doi.org/10.3846/jbem.2020.14018
Costantini, V., Crespi, F., Marin, G., & Paglialunga, E. (2017). Eco innovation, sustainable supply chains and environmental performance in European industries. Journal of Cleaner Production, 155(2), 141–154. https://doi.org/10.1016/j.jclepro.2016.09.038
Da Silva Rabêlo, O., & de Azevedo Melo, A. S. S. (2019). Drivers of multidimensional eco-innovation: Empirical evidence from the Brazilian industry. Environmental Technology, 40(19), 2556–2566. https://doi.org/10.1080/09593330.2018.1447022
Díaz-García, M. C., González, M. Á., & Saez-Martinez, F. J. (2015). Eco-innovation: Insights from a literature review. Innovation: Organization & Management, 17(1), 6–23. https://doi.org/10.1080/14479338.2015.1011060
Dogaru, L. (2020). Eco-innovation and the contribution of companies to the sustainable development. Procedia Manufacturing, 46, 294–298. https://doi.org/10.1016/j.promfg.2020.03.043
Dogaru, L. (2017). Environmental change and its effects. Curentul Juridic, 69(2), 38–43. https://econpapers.repec.org/article/pmucjurid/v_3a69_3ay_3a2017_3ap_3a38-43.htm
Eco-innovation Observatory. (2016). Policies and practices for eco-innovation up-take and circular economy transition (EIO bi-annual report). https://ec.europa.eu/environment/ecoap/policies-and-practices-eco-innovation-uptake-and-circular-economy-transition_en
Eco-Innovation Observatory. (2020). Eco-innovation and digitalisation: Case studies, environmental and policy lessons from EU member states for the EU green deal and the circular economy (EIO Biennial Report).
European Commission. (2020). Eco-innovation at the heart of European policies. Funding programmes. https://ec.europa.eu/environment/ecoap/about-action-plan/union-funding-programmes
Eurostat. (2020a). Eco-innovation index. Retrieved January 5, 2021, from https://ec.europa.eu/eurostat/tgm/table.do?tab=table&init=1&plugin=1&language=en&pcode=t2020_rt200
Eurostat. (2020b). Real GDP per capita. Retrieved January 5, 2021, from https://ec.europa.eu/eurostat/databrowser/view/sdg_08_10/default/table?lang=en
Fetahi-Vehapi, M., Sadiku, L., & Petkovski, M. (2015). Empirical analysis of the effects of trade openness on economic growth: An evidence for South East European countries. Procedia Economics and Finance, 19, 17–26. https://doi.org/10.1016/S2212-5671(15)00004-0
Fiore, M., La Sala, P., Adamashvili, N., & Contò, F. (2018, September 17–19). ICT-based modern farming and data management as drivers for sustainable agriculture. In CAP2020: Experiences and Ideas for Future Rural Areas and Development. XVI European Rural Development Network Conference, Cluj-Napoca, Romania.
Freimane, R., & Bāliņa, S. (2016). Research and development expenditure and economic growth in the EU: A panel data analysis. Economics and Business, 29(1), 5–10. https://doi.org/10.1515/eb-2016-0016
Fussler, C., & James, P. (1996). Driving eco-innovation: A breakthrough discipline for innovation and sustainability. Pitman Publishing.
Hojnik, J., & Ruzzier, M. (2016). What drives eco-innovation? A review of an emerging literature. Environmental Innovation and Societal Transitions, 19, 31–41. https://doi.org/10.1016/j.eist.2015.09.006
Hojnik, J., Ruzzier, M., & Manolova, T. (2018). Internationalisation and economic performance: The mediating role of eco-innovation. Journal of Cleaner Production, 171, 1312–1323. https://doi.org/10.1016/j.jclepro.2017.10.111
Horbach, J., Rammer, C., & Rennings, K. (2012). Determinants of eco-innovations by type of environmental impact – The role of regulatory push/pull, technology push and market pull. Ecological Economics, 78, 112–122. https://doi.org/10.1016/j.ecolecon.2012.04.005
Jang, E. K., Park, M. S., Roh, T. W., & Han, K. J. (2015). Policy instruments for eco-innovation in Asian countries. Sustainability, 7(9), 12586–12614. https://doi.org/10.3390/su70912586
Jian, J., Fan, X., Zhao, S., & Zhou, D. (2021). Business creation, innovation, and economic growth: Evidence from China’s economic transition, 1978–2017. Economic Modelling, 96, 371–378. https://doi.org/10.1016/j.econmod.2020.03.019
Kemp, R., & Mainguy, G. (2011). Ten themes for eco-innovation policies in Europe. Surveys and Perspectives Integrating Environment and Society, 4(2), 1–20. https://journals.openedition.org/sapiens/1169
Kemp, R., & Pearson, P. (2008). Final report MEI project about measuring eco innovation. https://www.oecd.org/env/consumption-innovation/43960830.pdf
Kiefer, C. P., Carrillo-Hermosilla, J., Del Rio, P., & Callealta Barroso, F. J. (2017). Diversity of ecoinnovations: A quantitative approach. Journal of Cleaner Production, 166, 1494–1506. https://doi.org/10.1016/j.jclepro.2017.07.241
King, A. A., & Lenox, M. J. (2001). Does it really pay to be green? An empirical study of firm environmental and financial performance. Journal of Industrial Ecology, 5(1), 105–116. https://doi.org/10.1162/108819801753358526
Lesakova, L., & Laco, P. (2020). Using the eco-innovation index to assess the eco-innovation performance: Case of Slovakia. Journal of Innovation & Business Best Practice, 2020, 347837, 1–11. https://doi.org/10.5171/2020.347837
Lopes Santos, D. F., Valente Rezende, M. D., & Cruz Basso, L. F. (2019). Eco-innovation and business performance in emerging and developed economies. Journal of Cleaner Production, 237, 117674. https://doi.org/10.1016/j.jclepro.2019.117674
Loučanová, E., & Nosáľová, M. (2020). Eco-innovation performance in Slovakia: Assessment based on ABC analysis of eco-innovation indicators. BioResources, 15(3), 5355–5365.
Mačiulytė-Šniukienė, A., & Davidavičienė, V. (2020, October 2). The impact of financial openness on eu member states productivity. In New challenges in economic and business development – 2020: Economic inequality and well-being: 12th international scientific conference proceedings (pp. 234–245). University of Latvia.
Musah, S., Gakpetor, E. D., Kyei, S. N. K., & Akomeah, E. (2018). Foreign Direct Investment (FDI), economic growth and bank performance in Ghana. International Journal of Finance and Accounting, 7(4), 97–107.
Nishitani, K., Jannah, N., Kaneko, S., & Hardinsyah. (2017). Does corporate environ-mental performance enhance financial performance? An empirical study of Indonesian firms. Environmental Development, 23, 10–21. https://doi.org/10.1016/j.envdev.2017.06.003
Oltra, V., & Saint Jean, M. (2009). Sectoral systems of environmental innovation: An application to the French automotive industry. Technological Forecasting and Social Change, 76(4), 567–583. https://doi.org/10.1016/j.techfore.2008.03.025
Organisation for Economic Co-operation and Development. (2018). Oslo manual. Guidelines for collecting, reporting and using data on innovation (4th ed.). https://www.oecd.org/science/oslo-manual-2018-9789264304604-en.htm
Pansera, M., & Owen, R. (2018). Innovation for de-growth: A case study of counter-hegemonic practice from Kerala, India. Journal of Cleaner Production, 197(Part 2), 1872–1883. https://doi.org/10.1016/j.jclepro.2016.06.197
Porter, M., & Van der Linde, C. (1995). Green and competitive: Ending the stalemate sustainability. https://hbr.org/1995/09/green-and-competitive-ending-the-stalemate
Rabadán, A., González-Moreno, Á., & Sáez-Martínez, F. J. (2019). Improving firms’ performance and sustainability: The case of eco-innovation in the agri-food industry. Sustainability, 11(20), 5590. https://doi.org/10.3390/su11205590
Reid, A., & Miedzinski, M. (2008). Eco-innovation. Final report for sectoral innovation watch (Systematic Eco-Innovation Report, pp. 1–3). Technopolis Group.
Rennings, K., Ziegler, A., Ankele, K., & Hoffmann, E. (2006). The influence of different characteristics of the eu environmental management and auditing scheme on technical environmental innovations and economic performance. Ecological Economics, 57(1), 45–59. https://doi.org/10.1016/j.ecolecon.2005.03.013
Rizos, V., Behrens, A., & Taranic, I. (2015). Measuring progress in eco-innovation. NETGREEN Policy Brief No. 1. www.ceps.eu
Roscoe, S., Cousins P., & Lamming, R. C. (2016). Developing eco-innovations: A three-stage typology of supply networks. Journal of Cleaner Production, 112(3), 1948–1959. https://doi.org/10.1016/j.jclepro.2015.06.125
Santos, D. F. L., Lima, M. M., Basso, L. F. C., Kimura, H., & Sobreiro, V. A. (2017). Eco-innovation and financial performance at companies established in Brazil. International Journal of Business and Emerging Markets, 9(1), 68–89. https://doi.org/10.1504/IJBEM.2017.080783
Schiederig, T., Tietzer, F., & Herstatt, C. (2012). Green innovation in technology and innovation management – an exploratory literature review. R&D Management, 42(2), 180–192. https://doi.org/10.1111/j.1467-9310.2011.00672.x
Socioeconomic Data and Applications Center. (2020). Environmental Performance Index (EPI). https://sedac.ciesin.columbia.edu/data/collection/epi/sets/browse
Tamayo-Orbegozo, U., Vicente-Molina, M. A., & Villarreal-Larrinaga, O. (2017). Eco-innovation strategic model. A multiple-case study from a highly eco-innovative European region. Journal of Cleaner Production, 142(4), 134–1367. https://doi.org/10.1016/j.jclepro.2016.11.174
Triguero, A., Moreno-Mondéjar, L., & Davia, M. A. (2013). Drivers of different types of eco-innovation in European SMEs. Ecological Economics, 92, 25–33. https://doi.org/10.1016/j.ecolecon.2013.04.009
United Nations Environmental Programme. (2014). The business case for eco-innovation. Retrieved December, 22, 2020, from https://wedocs.unep.org/handle/20.500.11822/10613
Vargas-Vargas, M., Meseguer-Santamaría, M. L., Mondéjar-Jiménez, J., & Mondéjar-Jiménez, J. A. (2010). Environmental protection expenditure for companies: A Spanish regional analysis. International Journal of Environmental Research, 4(3), 373–378.
Wendling, Z. A., Emerson, J. W., de Sherbinin, A., & Esty, D. C. (2020). 2020 Environmental performance index. Yale Center for Environmental Law & Policy, New Haven, CT.
Wielgórka, D., & Szczepaniak, W. (2019). Eco-innovation of enterprises operating in Poland against the background of EU countries. Global Journal of Environmental Science and Management, 5(SI), 113–121.
Yale Center for Environmental Law and Policy. (2020). Environmental performance index. https://epi.yale.edu/
Yurdakul, M., & Kazan, H. (2020). Effects of eco-innovation on economic and environmental performance: Evidence from Turkey’s manufacturing companies. Sustainability, 12(8), 3167. https://doi.org/10.3390/su12083167
Zeng, S. X., Meng, X. H., Zeng, R. C., Tam, C. M., Tam, V. W. Y., & Jin, T. (2011). How environmental management driving forces affect environmental and economic performance of SMEs: A study in the Northern China district. Journal of Cleaner Production, 19(13), 1426–1437. https://doi.org/10.1016/j.jclepro.2011.05.002
Zhang, D., & Rong, Z. J. Q. (2014). Green innovation and firm performance: Evidence from listed companies in China resource. Journal of Cleaner Production, 64(1), 81–90.