Abstract
This paper examines, for the first time, the impact of firms’ pursuit of eco-innovation upon the failure of innovation projects. The empirical analysis employs propensity score matching to account for endogeneity and unobserved firm heterogeneity using Spanish firm-level data during the 2008-2016 period. We find that eco-innovation increases firms’ exposure to failure. Also, we find that the likelihood of innovation failure differs across types of eco-innovations and phases of the innovation process. Our results suggest that eco-process innovators that improve the efficiency of materials are more likely to fail during the implementation phase, whereas eco-product innovators that develop new green products are more likely to fail at the conception phase.
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