TY - JOUR
T1 - Curvilinear relationship between corporate innovation and environmental sustainability
AU - Lee, Jegoo
AU - Kim, Sang Joon
N1 - Publisher Copyright:
© 2017 by the authors.
PY - 2017/7/20
Y1 - 2017/7/20
N2 - This paper proposes and tests the impacts of firms' innovation activities, such as patents, on their involvement in environmental sustainability, such as environmental performance. Combining resource allocation and eco-innovation perspectives assuming constant levels of trade-offcosts, this study proposes diminishing trade-offcosts between corporate innovation and environmental sustainability. Specifically, this research hypothesizes a U-shaped relationship, suggesting that a firm will suffer trade-offcosts between innovation and environment-oriented activities up to a certain level, and that once a firm accumulates an adequate level of innovation, it may reduce trade-offcosts, caring more for environmental issues. A proposed hypothesis is supported by empirical testing of a sample of 11,657 firm-year observations with 1564 firms, spanning from 1991 to 2010. We also found that corporate patenting activities are relevant to undesirable impacts on environmental performance overall, instead of satisfying outcomes. We suggest that firms and managers should care for environmental sustainability issues once they accumulate an adequate level of innovation assets through patenting activities.
AB - This paper proposes and tests the impacts of firms' innovation activities, such as patents, on their involvement in environmental sustainability, such as environmental performance. Combining resource allocation and eco-innovation perspectives assuming constant levels of trade-offcosts, this study proposes diminishing trade-offcosts between corporate innovation and environmental sustainability. Specifically, this research hypothesizes a U-shaped relationship, suggesting that a firm will suffer trade-offcosts between innovation and environment-oriented activities up to a certain level, and that once a firm accumulates an adequate level of innovation, it may reduce trade-offcosts, caring more for environmental issues. A proposed hypothesis is supported by empirical testing of a sample of 11,657 firm-year observations with 1564 firms, spanning from 1991 to 2010. We also found that corporate patenting activities are relevant to undesirable impacts on environmental performance overall, instead of satisfying outcomes. We suggest that firms and managers should care for environmental sustainability issues once they accumulate an adequate level of innovation assets through patenting activities.
KW - Curvilinear relationship
KW - Environmental performance
KW - Environmental sustainability
KW - Innovation
KW - Patent
KW - Trade-offcost
UR - http://www.scopus.com/inward/record.url?scp=85025468418&partnerID=8YFLogxK
U2 - 10.3390/su9071267
DO - 10.3390/su9071267
M3 - Article
AN - SCOPUS:85025468418
VL - 9
JO - Sustainability (Switzerland)
JF - Sustainability (Switzerland)
SN - 2071-1050
IS - 7
M1 - 1267
ER -