Green Innovation Strategies, Innovation Success, and Firm Performance—Evidence from a Panel of Spanish Firms

This paper examines the effects of adopting types of green innovation strategies on a firm’s innovation success and performance. The empirical analysis applies propensity score and kernel matching to a Spanish firm panel during 2008–2016. The results provide robust evidence that the pursuit of green innovation strategies increases a firm’s innovation success in the form of higher turnover due to new-to-market, or radical product innovation compared with innovating firms that do not adopt green innovation strategies. However, despite this positive effect on the competitiveness of firms that adopt green innovation strategies, they are generally little able to benefit in terms of their performance. While the results suggest improvements in the labour productivity of firms that adopt general green innovation strategies, no effects are experienced by firms that adopt green product innovation strategies. Moreover, the results suggest the absence of any firm performance benefits in terms of turnover or employment growth. These findings indicate that markets do not provide ‘win-win’ situations, and policy intervention is critical to support green innovation strategies.