Green innovation: Unfolding the relation with environmental regulations and competitiveness

Abstract

The present study intends to analyze how the degree of severity of environmental regulations and the international competitiveness of the countries affects the efforts in Green Innovation (GI) of companies of the industrial sector of Developed Countries (MEDC) and developing countries (LEDC). The survey sample consisted of 186 industrial companies, which are listed in the Financial Times' top 500 companies by market value in 2015, of which 114 were MEDC and 72 were LEDC. For the analysis, we used Structural Equation Modeling to verify the relationship between the variables. The main results were, among the antecedents of the green innovation analyzed, the rigor of the environmental regulations of the countries and the size of the companies had a statistically significant positive impact of the industrial enterprises of the MEDC and LEDC only in the IV2 construct, composed of the variables Global Compact and environmental investments. The competitiveness of the countries did not have a positive influence on the GI effort of the companies, and the Degree of Internationalization of companies has not had a significant effect on any of the GI constructs. Moreover, the results also showed that the relationship between environmental regulation and GI is moderated positively by the size of the companies and moderated negatively by the degree of internationalization, and the relation between the competitiveness of the countries and GI is negatively moderated by the size of the companies and moderated positively by its degree of internationalization. Although there is a prevailing view that environmental regulations provide a greater effort on the part of companies with green innovation, in this study it was verified that this relation can be positive or negative, and can also be modified by external factors such as size and the degree of internationalization of companies.