19/2007
October
Environmentally-oriented innovative strategies and firm performances in services. Micro-evidence from Italy
 
Giulio Cainelli, Massimiliano Mazzanti, Roberto Zoboli


This paper aims at analysing the role of environmental purposes behind innovative strategies with respect to service firms' economic performance indicators such as employment, turnover, and labour productivity growth. In so doing, we exploit a unique merged database of 773 Italian service firms with 20 or more employees consisting of 1993-1995 CIS II data on firm innovation strategic motivations and 1995-1998 original firm performances data on employment, turnover, and labour productivity, drawn from the System of the Enterprise Account (SEA). The empirical model we specify is based on Gibrat-like approach, where covariates are firm strategies, including innovations strategies and environmental minded strategies, and a set of other explicative variables and controls. Our econometric findings show a negative link between environmentally minded motivations and both employment and turnover growth, while, as a consequence, the effect on labour productivity growth is not significant. The effect on employment is partially in line with past evidence and it may derive from efficiency improvements (dematerialization processes) that also impacts on efficiency through reducing the workforce. It is plausible that the net effect is deriving from a destruction of low skilled employees and a creation of high skilled ones, as a consequence of increased environmental awareness and strategy. The effect on turnover claims for a negative impact of environmental innovation strategy, implying either a short-medium effect, possibly balanced in the long run by net benefits in terms of higher added value, or a real negative impact, that may be contingent to the observed period, wherein environmental strategies where not at the heart of strategic management policies. Despite this, productivity-related effects (the core of performance indicators) are not significant. Mainstream oriented hypotheses regarding eventual negative impacts are thus not confirmed, although, as said, Porter-like effects and virtuous circles between environmentally strategies and performances do not seem to appear in this investigation.

 
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