Types of Innovation and Sustainable Development: Evidence from Medium- and Large-sized Firms

Abstract

In the last few decades, the connection between innovation and sustainable development has been brought to the surface due to the concerns of academics, scientists, and policymakers regarding environmental and social issues. Although numerous studies have discussed the significance of innovation in achieving corporate sustainable development (CSD), the relationship between these two concepts remains vague. Under this background, the aim of this study was to examine which types of innovation have a significant impact on CSD. In particular, four types of innovation were tested — incremental, radical, product, and process innovation — with the three dimensions of CSD: the social, environmental, and economic dimensions. The data collected from medium- and large-sized firms revealed that incremental, radical, and process innovation had a significant positive impact on CSD. These results have substantial theoretical and managerial implications, as they indicate what types of innovation managers should focus on in order to improve their sustainable business performance.