Process innovation and environmental sustainability engagement: An application on technological firms

This study makes a contribution to the current literature by analysing how an internal strategic decision, process innovation, interacts with some features of the external environment to explain environmental sustainability engagement by companies. Drawing on economic and institutional rationales, three hypotheses are proposed to examine the relationship between process innovation and environmental sustainability engagement, considering the role played by the competitive and institutional context in which the firm operates. The hypotheses are tested using a sample of 239 companies in high-tech sectors operating in Spanish science and technology parks. Using a non-parametric test, the results show that companies that perform process innovation are more engaged in environmental sustainability. Based on hierarchical regression models, further results show that performing process innovation more than competitors is related to higher environmental sustainability engagement. However, when time is considered in the model as an explanatory factor, the effect exerted by the institutional environment fades away. Furthermore, the results show that as companies accumulate years operating in a science and technology park, the relationship between process innovation and environmental sustainability engagement even becomes negative. These findings suggest that there is a strong link between process innovation and sustainability engagement. Companies tend to satisfy both economic restrictions posed by their competitive environment and institutional pressures exerted by their stakeholders, albeit in a manner that is not evenly distributed over time. Similarly, firms devote more attention to institutional pressures at the beginning and to economic requirements in later stages of their evolution within science and technology parks.