Empirical influence of environmental management on innovation: Evidence from Europe

This paper analyses the hypothesis that environmental management systems (EMS) and managerial activities to reduce negative environmental impacts which are not part of EMS have a positive influence on the probability of firms to carry out environmental innovations. Based on binary and multinomial discrete choice models, the relationship of a number of determinants on the occurrence of environmental innovations is studied using data collected during the “European Business Environment Barometer 2001/2002” survey in 9 European states. The study finds that environmental management systems are associated with process innovations. However, the study does not find that environmental management systems are associated with product innovations. For product innovations, mainly information of consumers and eco-labelling activities show a positive association. Market research on the potential of environmental innovations positively relates to both process and product innovations. Importantly, firm size is not found to have any effect on the probability of a firm carrying out environmental product or process innovations.