Environmental Orientation as a Determinant of Innovation Performance in Young SMEs

The popular press, as well as most academic literature, claims that innovation activities are inherently linked to higher company performance. Successful innovations usually increase the firm's market scope or reduce costs, helping firms to obtain superior benefits. Therefore, most innovations are developed with those objectives in mind. Environmental orientation is defined as the managerial recognition of the significance of the impact a company has on the environment, and the need to minimize such impact. Nowadays, environmental motivation for innovation is becoming more and more common as firms are more aware of the consequences of their activities and attempt to be socially responsible. However, most literature on innovation is focused on R&D and on large mature firms, practically neglecting small and medium sized Enterprises - SMEs-, as does the literature on corporate social responsibility. In this paper, we focus on a sample of 1337 start-up SMEs less than 10 years old, from which we obtained information regarding their innovation activities. Our results show that in comparison to cost-oriented innovations, environmental orientation in the development of innovations increases performance.

[1]  James M. Sinkula,et al.  The synergistic effect of market orientation and learning orientation on organizational performance , 1999 .

[2]  L. Ngo,et al.  Innovation and business success: The mediating role of customer participation , 2013 .

[3]  K. Rennings,et al.  Lead markets and regulation: a framework for analyzing the international diffusion of environmental innovations , 2005 .

[4]  Juan-Antonio Mondéjar-Jiménez,et al.  CATEGORIZING VARIABLES AFFECTING THE PROACTIVE ENVIRONMENTAL ORIENTATION OF FIRMS , 2013 .

[5]  Heidi Armbruster,et al.  Organizational innovation: The challenge of measuring non-technical innovation in large-scale surveys , 2008 .

[6]  Madalina Petraru,et al.  Pollution prevention, a key to economic and environmental sustainability. , 2010 .

[7]  J. Jaccard,et al.  LISREL Approaches to Interaction Effects in Multiple Regression , 1998 .

[8]  Casey Ichniowski,et al.  The Effects of Human Resource Management Practices on Productivity , 1995 .

[9]  Eugene Sadler-Smith,et al.  Organizational Learning in Smaller Manufacturing Firms , 2006 .

[10]  Andrés Raineri,et al.  Change management practices: Impact on perceived change results , 2011 .

[11]  S. Banerjee,et al.  Corporate environmentalism : the construct and its measurement , 2002 .

[12]  Elena Pirani,et al.  Eco-Friendly Attitudes: What European Citizens Say and What They Do , 2011 .

[13]  K. Atuahene–Gima,et al.  Strategic Decision Comprehensiveness and New Product Development Outcomes in New Technology Ventures , 2004 .

[14]  Steven C. Wheelwright,et al.  Strategic Management of Technology and Innovation , 1992 .

[15]  K. Pavitt.  Sectoral Patterns of Technical Change : Towards a Taxonomy and a Theory : Research Policy , 1984 .

[16]  Caroline Mothe,et al.  The link between non‐technological innovations and technological innovation , 2010 .

[17]  Lei-Yu Wu,et al.  Which companies should implement management innovation? A commentary essay , 2010 .

[18]  A. Revell.  Small businesses and the environment: turning over a new leaf? , 2011 .

[19]  José Mondéjar-Jiménez,et al.  MEASURING ENVIRONMENTAL EVOLUTION USING SYNTHETIC INDICATORS , 2010 .

[20]  Robert Rutherfoord,et al.  UK environmental policy and the small firm: broadening the focus , 2003 .

[21]  José Mondéjar-Jiménez,et al.  Influence of the Environmental, Social and Corporate Governance Ratings on the Economic Performance of Companies: An overview , 2013 .

[22]  J. Schumpeter.  The Theory of Economic Development: An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle , 1934 .

[23]  Kay H. Hofmann,et al.  Identifying Firm Capabilities as Drivers of Environmental Management and Sustainability Practices – Evidence from Small and Medium-Sized Manufacturers , 2012 .

[24]  Daniel C. Esty,et al.  Green to gold : how smart companies use environmental strategy to innovate, create value, and build competitive advantage , 2006 .

[25]  Esther P. Y. Tang,et al.  Innovation strategy and performance during economic transition : evidences in Beijing, China , 2009 .

[26]  J. Birkinshaw,et al.  The sources of management innovation: When firms introduce new management practices , 2009 .

[27]  Jae-On Kim,et al.  Factor Analysis: Statistical Methods and Practical Issues , 1978 .

[28]  Castellacci Fulvio.  Technological paradigms, regimes and trajectories: Manufacturing and service industries in a new taxonomy of sectoral patterns of innovation , 2007 .

[29]  Z. Ács,et al.  Innovation and Small Firms , 1990 .

[30]  Justin J. P. Jansen,et al.  Management Innovation and Leadership: The Moderating Role of Organizational Size , 2012 .

[31]  Garry D. Bruton,et al.  STRATEGIC MANAGEMENT OF TECHNOLOGY AND INNOVATION , 2011 .

[32]  Mario Kafouros,et al.  What factors determine innovation performance in emerging economies? Evidence from China , 2009 .

[33]  Lucie K. Ozanne,et al.  Challenges of the “green imperative”: a natural resource-based approach to the environmental orientation–business performance relationship , 2005 .

[34]  The Effect of Technology and Trade on Wage Differentials between Nonproduction and Production Workers in Canadian Manufacturing , 1998 .

[35]  Jan Carel Diehl,et al.  Innovation process of new ventures driven by sustainability , 2013 .

[36]  Andrew L. Friedman,et al.  SMEs and the environment: evaluating dissemination routes and handholding levels , 2002 .

[37]  Zulima Fernández,et al.  The relation between firm size and R&D productivity in different technological regimes , 2012 .

[38]  M. Vargas Vargas,et al.  ENVIRONMENTAL PROTECTION EXPENDITURE FOR COMPANIES: A SPANISH REGIONAL ANALYSIS , 2010 .

[39]  Giorgio Garau,et al.  A Statistical Information System supporting Environmental Policies , 2011 .

[40]  Angel Peiro-Signes,et al.  Impact of Innovative Practices in Environmentally Focused Firms: Moderating Factors , 2011 .

[41]  Lies Bouten,et al.  Sustainable Entrepreneurship and Sustainability Innovation: Categories and Interactions , 2012 .

[42]  D. Third.  OECD/Eurostat . Oslo Manual-Guidelines for Collecting and Interpreting Technological Innovation Paris, France: , 2005 .

[43]  S. Banerjee.  Corporate Environmentalism , 1998 .

[44]  Choton Basu,et al.  The innovativeness of Born-Globals and customer orientation: Learning from Indian Born-Globals , 2011 .

[45]  Nan S. Lalgowitz.  Motivations for innovation in firms: Economic insight into the U.S. competitive stance , 1991 .

[46]  Rohit Verma,et al.  Eco-Innovation attitude and Industry'a technological level. An important key for promoting efficient vertical policies , 2011 .

[47]  A. Alambeigi,et al.  Government Facilitator Roles and Ecopreneurship in Environmental NGOs , 2012 .

[48]  Luc Soete,et al.  Internationalization of services: A technological perspective , 2001 .

[49]  Xavier Vence,et al.  Scope and patterns of innovation cooperation in Spanish service enterprises , 2012 .

[50]  J. Mondéjar Jiménez,et al.  Environmental Sustainable Management of Small Rural Tourist Enterprises , 2010 .

[51]  Gregory S. Carpenter,et al.  Measuring Marketing Productivity: Current Knowledge and Future Directions , 2004 .