Innovation, environment, and productivity in the Spanish service sector: An implementation of a CDM structural model

A total of 30.93% of Spanish service sector companies consider the reduction of their environmental impact to be a significant objective when they invest in Research and Development (R&D). This article analyses the achievement of this objective as a determinant of process innovations and their impact on business productivity. A Crépon, Duguet and Mairesse (CDM) structural model was used to quantify the associations between investment in R&D, the introduction of process, product, and organizational innovations, and productivity. The model was applied to a sample of Spanish service sector companies whose data were obtained from the Technological Innovation Panel database. The econometric results suggest that reducing the environmental impact has a statistically significant and positive effect on the following aspects: Firstly, on the probability of engaging in R&D activities in companies and on R&D intensity; secondly, on the likelihood of firms making innovations; and thirdly, on service company productivity. In the latter case, ecoinnovative companies show an 11% increase in productivity compared to non-ecoinnovative companies.