The role of innovation portfolio in green innovation decisions: A study of French and Italian firms

Recent research has shown that Green Innovation (GI) may be a profitable strategy, provided that the innovating firm enjoys synergies raised by specific combinations of innovation domains. Therefore, GI decisions may depend on the firm's overall innovation portfolio. Along this line of research, this paper aims at identifying combinations of innovation domains (product, process, organization and marketing) which affect a firm's decision to engage in green innovation. We propose a conceptual framework of interactions among innovation domains whose hypotheses are tested based on the Community Innovation Survey (CIS 2012-2014) dataset for France and Italy. Separately for each country, we identify synergic effects of technological (product and process), nontechnological (organizational and marketing), demand-related (product and marketing) and supply-related (process and organizational) innovation domains. We find that all the above synergy axis favor GI, and this holds regardless of the surveyed country. However, other combinations of innovation domains do not favor GI and may even hinder it. Specifically, the interaction between process and marketing innovation, might have a negative effect on a firm's likelihood to engage in GI. This occurs in the French sample, while the effect is neutral in the Italian one.