The Role of an SME’s Green Strategy in Public-Private Eco-innovation Initiatives: The Case of Ecoprofit

Abstract Increasingly, eco-innovation is a major challenge for small and medium-sized enterprises (SMEs). To diffuse eco-innovation, public support programs have been established as inter-organizational networks between local authorities and smaller companies. Based on seven public-private partnership cases from the eco-efficiency Ecoprofit initiative, we identified three behavioral patterns (hold-up, step-up, and frontrunner) developed by the companies within the partnership. These were the result of an interaction between the companies’ green strategy and their related level of absorptive capacity, which influenced their ability to respond to the handholding processes offered in the partnership. Reactive companies mostly benefit from agent-based instruments (e.g., individual consulting). More proactive companies can also capitalize on peer-based handholding (e.g., ‘clubs’). The longitudinal research design shows that public-private partnerships can stimulate adaptations in a company’s green strategy over time. Propositions and an integrated framework are developed with implications for policy makers.