Eco-innovation strategies: A panel data analysis of Spanish manufacturing firms

This paper examines the determinants of eco-innovation strategy in Spanish manufacturing firms. Using panel data of 3,201 Spanish firms for the period 2008-14, we specify a dynamic random probit model controlling for sample selection. The empirical results confirm that public regulations and R&D efforts encourage firms to place eco-innovation activities among their strategic priorities, although subsidies are not found to be a distinctive driver. Furthermore, we find that eco-innovation is highly persistent at the firm level, past eco-innovation behavior being clearly of key importance in explaining the current state of a firm's eco-innovation orientation. In contrast, market factors are not found to be a key driver for eco-innovative firms.