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

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.