Abstract
“Reduction of material and energy consumption” (RMEC) exists as a major objective of innovation and it is proved to affect positively to innovation performance from previous literature. Though innovation should be measured in efficiency rather than performance itself, however, the relationship between material and energy reduction on innovation efficiency is still unanswered. In this paper, we analyzed the effect of RMEC on innovation efficiency considering both innovation inputs and outputs. We utilized data of 388 manufacturing enterprises in Korea, and performed data envelopment analysis (DEA) and tobit regression analysis. According to the result, firms show difference by industry type in terms of innovation efficiency and RMEC. Moreover, the effect of RMEC on innovation efficiency turned out to be negative. The result indicates a possibility that input used for innovation might overweigh the output yielded when firms pursue innovation for the RMEC.
Highlights
The importance of sustainable innovation has been grown for both practitioners and researchers for several years [1,2]
Given that sustainability has become major innovation objective and reduction of material and energy consumption (RMEC) exists as a key component of sustainability, we investigate the effect of RMEC as innovation objective on innovation efficiency
The result is surprising that diverse literature pointed out the benefits of reducing material and energy consumption, such as increasing competitive advantage, profitability, and firm performance
Summary
The importance of sustainable innovation has been grown for both practitioners and researchers for several years [1,2]. Recent studies discovered that sustainability-related motivations, such as preventing harmful effect on environment, improving safety for workers, and reduction of material and energy consumption (RMEC), have become major objectives of innovation from diverse countries [3,4,5]. RMEC, which is a key component of sustainability, turned out to be major objective of innovation in diverse countries [6]
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