MMTC seminar with Hani Elzoumor, Daniel Ljungberga, and Ethan Gifford (University of Gothenburg).

Hani is presenting the research titled as “Environmental innovations and economic performance of innovative firms: The role of ecosystem’s public funds and firm’s integration mechanisms”.

This study investigates the relationship between environmental innovations (EIs) and the economic performance of innovative firms. It also addresses the moderating role of government financial support as an external ecosystem factor and social integration mechanisms (SIMs) as a firm capability of this relationship. Firms increasingly adopt EIs to boost competitiveness and achieve sustainability. However, previous literature shows mixed results on how EIs impact firm performance and what conditions and mechanisms hold this relationship positive. The study distinguishes between two types of environmental innovations—cleaner integrated technologies and end-of-pipe technologies— examining their respective impacts on firm’s total factor productivity (TFP) (as a technical efficiency indicator) and net sales (as a financial performance indicator). Using data from 6,843 Swedish firms from the 2018 and 2020 waves of the Community Innovation Survey, we apply hierarchical regression analysis and conduct additional robustness checks, such as the Heckman two-step model, to explore these dynamics. The findings indicate that cleaner integrated  technologies have a more substantial positive effect on firm performance compared to end-of-pipe technologies. Public financial support plays a crucial role in strengthening EIs’ effect on firm performance. However, such funds also exhibit insignificant or even strongly negative direct effects on firm performance in some cases (e.g., TFP for the former and net sales for the latter). Conversely, SIMs, despite showing a direct positive influence on performance, do not significantly moderate the relationship between EIs and economic outcomes. The study concludes that investments in cleaner technologies, combined with well-aligned external knowledge integration, are key for firms aiming to leverage environmental innovations for competitive advantage. These results have implications for both policy and business strategies concerning the deployment of public funds and the fostering of firm’s internal capabilities for managing environmental innovation.

The seminar will run in a hybrid format, you can join in room B6046 or on Zoom