TY  - JOUR
AB  - Purpose– Recent reports argue that eco‐innovation is the key to realising growth. The purpose of this paper is to examine the factors which drive eco‐innovation and test if eco‐innovating firms perform better than non‐eco‐innovating firms. The paper provides insights into the role government regulation can play in directing and stimulating eco‐innovation.Design/methodology/approach– The approach utilised by this paper is empirical in nature. Using a sample of 2,181 firms, gathered as part of the Irish Community Survey 2006‐2008, the authors estimate a modified innovation production function in order to assess the impact of regulation, consumer expectations and voluntary agreements on the performance of eco‐innovation, subsequently a knowledge augmented production function is estimated to assess the impact of eco‐innovation on firm performance.Findings– The findings suggest that regulation and customer perception can explain a firm's decision to engage in eco‐innovation. Eco‐innovation is also found to be more important than non‐eco‐innovation in determining firm performance.Research limitations/implications– Due to the limited availability of accounting data this paper uses turnover per worker as the measure of firm performance. As a result, it is not possible to assess the impact of eco‐innovation on firm costs.Social implications– The finding that regulation drives eco‐innovation, and that there is no trade‐off between eco‐innovation and higher profit margins for innovating firms, suggests that regulators and policy makers can stimulate growth and create a greener society.Originality/value– This paper provides an empirical analysis of the Porter and van der Linde's theory of environmental regulation and firm performance using novel real world data from over 2,000 Irish businesses.
VL  - 15
IS  - 4
SN  - 1460-1060
DO  - 10.1108/14601061211272367
UR  - https://doi.org/10.1108/14601061211272367
AU  - Doran Justin
AU  - Ryan Geraldine
ED  - Barbara Bigliardi
ED  - Massimo Bertolini
PY  - 2012
Y1  - 2012/01/01
TI  - Regulation and firm perception, eco‐innovation and firm performance
T2  - European Journal of Innovation Management
PB  - Emerald Group Publishing Limited
SP  - 421
EP  - 441
Y2  - 2024/04/20
ER  -