What drives eco-innovation? A review of an emerging literature

Abstract

This paper provides an overview of the emerging literature on the drivers of eco-innovation. Its main contribution lies in separating the drivers associated with the phases of development and diffusion and in identifying particular drivers based on different eco-innovation types. We find that research in this area primarily adopts the resource-based and institutional theories as its theoretical foundations and that the prevailing effects identified are those of regulations and market pull factors. Moreover, product eco-innovation, process eco-innovation, organizational eco-innovation, and environmental R&D investments seem to be driven by common drivers, such as regulations, market pull factors, EMS, and cost savings, as well as to be positively associated with company size. The majority of the studies in our literature review employ a quantitative research methodology and focus on the diffusion stage of eco-innovation. We end with providing a synthesis of drivers of companies’ eco-innovation and directions for future research.