Innovating for a greener future: the direct and indirect effects of firms' environmental objectives on the innovation process

This paper examines how firms' “environmental mode” affects the innovation process. Extending the literature on determinants to innovation, we postulate that engaging in an “environmental mode” (measured by the adoption of environmental objectives by firms) will influence the innovation process both directly and indirectly. Based on a theoretical mapping of the determinants of innovation, and a large scale survey among firms we argue that firms engage in an “environmental innovation mode” and that this mode will be intertwined with firms' product and process modes. To have an environmental impact, environmental objectives need to be implemented in the form of either a new product or a new process. Hence, environmental innovation can be conceptualized as an additional mode of innovation that interacts with other modes and innovation processes within firms. Theoretical implications of our empirical results are discussed.