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Sustainability 2017, 9(7), 1267; doi:10.3390/su9071267

Curvilinear Relationship between Corporate Innovation and Environmental Sustainability

1
Meehan School of Business, Stonehill College, Easton, MA 02357, USA
2
Ewha School of Business, Ewha Womans University, Seoul 03760, Korea
*
Author to whom correspondence should be addressed.
Received: 7 June 2017 / Revised: 3 July 2017 / Accepted: 11 July 2017 / Published: 20 July 2017
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Abstract

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-off costs, this study proposes diminishing trade-off costs between corporate innovation and environmental sustainability. Specifically, this research hypothesizes a U-shaped relationship, suggesting that a firm will suffer trade-off costs 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-off costs, 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. View Full-Text
Keywords: innovation; environmental sustainability; patent; environmental performance; trade-off cost; curvilinear relationship innovation; environmental sustainability; patent; environmental performance; trade-off cost; curvilinear relationship
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This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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Lee, J.; Kim, S.-J. Curvilinear Relationship between Corporate Innovation and Environmental Sustainability. Sustainability 2017, 9, 1267.

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