Environmental Innovations, Local Networks and Internationalization

Abstract

This paper investigates the forces correlated with environmental innovations (EIs) introduced by firms in local production systems (LPS). The role of inter-firm network relationships, agglomeration economies and internationalization strategies is jointly analysed for a sample of 555 firms in the Emilia–Romagna (ER) region (North-East Italy). Cooperating with a certain kind of local actors—i.e. suppliers and universities—is the most important EI driver for the investigated firms, along with their training coverage and their adoption of information and communication technologies. The role of agglomeration economies is instead less clear-cut. They spur EIs only in the presence of established LPS, with idiosyncratic sector specialization, while conversely they act as EI barriers. Networking effects and agglomeration economies are instead found to strongly promote the adoption of EIs by multinational firms, thus highlighting the importance of local–global interactions. Interesting specifications for these results are found for particular kinds of EIs, in such fields as CO2 abatement and ISO labelling, generally extending the analysis of EI drivers by joining local and international factors. In addition, the role of regulatory sector factors confirms the induced innovation hypothesis and provides a robustness check to our results.