Sustainability as a driver of green innovation investment and exploitation

Abstract

This paper examines what drives green innovation investment and exploitation with regard to sustainability. The specific focus of this paper is on company valuations of different dimensions of sustainability and their relationships to green innovation. Empirical data were gathered from a cross-section of horse industry companies located in Finland. The scientific value of the paper lies in showing that certain dimensions of sustainability lead to the exploitation of and investment in green innovation, while other dimensions do not. The results of this study’s regression analyses show that the more a company values economic, institutional, and social sustainability, the more likely it is to invest in green innovation. Further, a high valuation of institutional and economic sustainability increases the willingness to exploit green innovation. The valuation of environmental sustainability was not found to affect the willingness to invest in or exploit green innovation. Our results suggest that green innovation is driven by economic and institutional pressures, and that such innovation can create value in terms of social sustainability.