Abstract
Development of innovation is recognised as a most powerful tool for the economic growth of countries. However, their effects on the quality of the environment are still being debated. To achieve sustainable development, eco-innovation becomes significant. EU countries expand eco-innovation activities, but it is not clear whether its development achieves the goal of economic growth and improves the quality of the environment. Purpose – to present how EU Member States perform in economic growth, environment and eco-innovation development and to evaluate eco-innovations impact on economic and environmental performance. Research methodology – the random effect regression was used for investigation relationship between eco-innovation, economic growth and environmental performance. Findings – eco-innovation development influences not only EU MS economic growth but also has a positive effect on environmental performance. Research limitations – eco-innovations development and economic growth can be interdepended, but this research investigates just one-way dependence. Granger causality test can be used for relationship assessment in the future. Practical implications – the research results can be used for both the development of environmental policy and the policy of business support for eco-innovation implementation. Originality/Value – study results confirmed previous assessment results on eco-innovation and economic growth and provided new knowledge of their effect on environmental performance.
Highlights
In recent times, politicians, the public, and, in parallel, researchers have been paying increasing attention to environmental quality analysis and initiatives to improve it
We developed two Random Effects econometric models for panel data covering real GDP per capita and Environmental performance index as dependent variables, eco-innovation index as an independent variable, and control variables
Through literary review on empirical studies we found evidence that eco-innovations help the countries to improve growth potential, create new opportunities and help the business sector to reduce expenses, strength a company image among its customers, investors and stakeholders, improve cost proficiency, increases sales and profit, expand market share and achieve sustainable competitive advantage
Summary
Politicians, the public, and, in parallel, researchers have been paying increasing attention to environmental quality analysis and initiatives to improve it. In response to environmental concerns, socially responsible businesses are developing new business and management models, new services or products, and new production processes that can protect and improve environmental quality. It means – implements eco-innovations to business activities. The development of innovations is generally considered to have a positive impact on business competitiveness, and in parallel, on the country’s economic growth, through capital accumulation and productivity growth Their development, especially eco-innovations, involves a significant investment, so it is unclear their return, especially in the short term. The extent of eco-innovation development varies between countries, and outcomes at the macro level may vary
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