The Role of External Support on the Implementation of Resource Efficiency Actions: Evidence from European Manufacturing Firms

David Aristei,Manuela Gallo

doi:10.3390/su13179531

Abstract

This paper contributes to analyze the relationship between firms’ recourse to different types of external support and adoption of environmental sustainability practices. To this aim, we consider both direct financial support and indirect support, in the form of advice and consulting services, upon which the firm relies on in its efforts to be more resource efficient. The empirical analysis uses data on 6595 manufacturing firms from 35 European countries, taken from the third and fourth waves of the Flash Eurobarometer survey “Small and Medium Enterprises, Resource Efficiency and Green Markets”. Our empirical findings suggest that firms using external financing and external advice are more likely to implement greening investments and practices. Moreover, we provide strong empirical evidence that external support significantly contributes to increase the benefits from the adoption of resource efficiency actions in terms of production cost reduction. This study further contributes to the existing literature by highlighting the heterogenous effects of direct and indirect external support on the environmental sustainability actions of both SMEs and large firms.

Highlights

This paper contributes to analyze the relationship between firms’ recourse to different types of external support and adoption of environmental sustainability practices
This paper explores the impact of different types of external support on a firm’s adoption of resource efficiency actions and investment behavior and on the benefits from the adoption of such actions
We rely on crosssectional data from the third and fourth waves of the Flash Eurobarometer survey “small and medium enterprises (SMEs), resource efficiency and green markets”, focusing on 6595 SMEs and large manufacturing firms from 35 European countries

Summary

Introduction

This paper contributes to analyze the relationship between firms’ recourse to different types of external support and adoption of environmental sustainability practices. The increase in energy consumption, the need to reduce emission of greenhouse gases, the progressive depletion of natural resources and the dependence on energy from countries characterized by unstable political regimes have generated the need for eco-innovative solutions It follows that firms are called upon to change their business model, taking into greater account the environmental and social values. Firms’ ability to integrate and align multiple forms of value (commercial, economic and financial values and environmental and social values) within their business models is a timely and important issue that affects firms’ development but even the economic system as a whole The challenges in this field are numerous, especially for small and medium enterprises (SMEs). This new development model is based on the resource efficiency in a logic of circularity, and on innovation in terms of eco-design, with the aim to reduce negative externalities on the environment since the design and development phases

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