GREEN INNOVATION LAUNCH VERSUS EXPANSION: DO THE PUBLIC POLICY SUPPORTS NEEDED VARY BY FIRM SIZE?

Abstract

Green innovation is garnering increasing attention in business, academic and policy circles as a route to sustainable growth and development. Governments have introduced a range of policies to encourage and enable firms to introduce and expand their offerings of environmental friendly goods and services. While environmental regulation has been shown to be an important driver of green innovation, little is known about whether other types of polices, such as financial incentives, technical and marketing supports, and assistance with identifying potential markets, are important to firms of all sizes at different stages of the green innovation process (i.e., at product/service launch vs. product/service expansion). Using data from the European Commission, the results show that policy support to identify markets or customers is deemed important by firms of all sizes to introduce green goods and services. However, this support is no longer perceived as important to expand firms’ green portfolio. This suggests firms capitalise by using their existing markets or customers. The results do not lend support to the view of small firms as the most resource constrained and hence needing the greatest policy supports. Overall, the results point to the need for a variety of policy supports targeted at (1) firms of different sizes and (2) by stage of the green innovation process.