Eco-innovation by small and medium-sized firms in Europe: from end-of-pipe to cleaner technologies

Abstract

This paper focuses on the relevant drivers of eco-innovation in 5,135 small and medium-sized enterprises (SMEs). In particular, we study if there are differences between the determinants of end-of-pipe and adoption of cleaner technologies between small and medium firms located in 27 European countries. Using a bivariate probit, significant differences comparing small with medium firms are found. Network involvement measured by cooperation with universities and research agencies is essential in both types of eco-innovation in small firms, but not for mid-sized firms. With regard to environmental regulation, subsidies are important only for small firms, especially for the adoption of cleaner technologies. On the contrary side, existing environmental regulation is a key factor to explain the adoption of cleaner technologies for medium firms but not for smaller ones.