Claudia Ghisetti

A Survey of the Literature on Environmental Innovation Based on Main Path Analysis

This paper reviews the literature on environmental innovation (EI) and systematizes it by means of an original methodology identifying the main directions in which the literature on EI has developed over time. In order to do so, two algorithms are adopted and used to analyze a citation network of journal articles and books. The main path analysis reveals that this literature revolves around the following topics: i) determinants of EI; ii) economic effects of EI; iii) environmental effects of EI; and iv) policy inducement in EI. Each of these topics is discussed and implications from the main findings as well as possible future research extensions are outlined.

Financial barriers and environmental innovations: evidence from EU manufacturing firms

We analyse the role of financial barriers in affecting the adoption of environmental innovations (EI) with a focus on manufacturing small and medium-sized enterprises in Europe. In taking stock of the consolidated literature on EI, we find that the role of financial barriers is substantially neglected, although crucial, even more relevant in the current phase of the economic cycle. Our empirical analysis confirms the existence of direct negative effects of financial barriers on environmental innovation investment decisions. It furthermore sheds more light on the determinants of financial barriers that shape firms’ cleaner production choices. Our findings have the following policy implications: properly designed policies can play a critical role, not only by stimulating EI through their determinants, but also by acting on the financial obstacles to eco-innovation. Policy relevance Environmental innovations (EI) are essential to achieve economic growth and environmental protection goals. Technological development is one of the key factors that can counterbalance the growth and population emission-augmenting effects. EI are a priority in major EU policy strategies and a prerequisite for the development of a ‘Resource efficient Europe’, one of the flagship initiatives of Europe 2020. The existence of financial barriers can constitute a serious deterrent for the eco-innovative capacity of firms, even more than for ‘traditional’ innovations, as EI are characterized by high technical risk, long payback period and uncertainty on the appropriability of private rents. This article analyses in depth whether barriers related to external financing affect EI investments and whether the stringency of financial constraints to investments in EI is affected by factors related to EI specificities. We show that when both direct and indirect effects on EI investments are considered, the role of the policy framework appears to be as particularly crucial in order to reverse the risk/return trade-off of eco-innovative investments. Targeting policy interventions to facilitate access to credit and to mitigate capital markets’ imperfections is essential to mitigate the apparent contradiction between EU industrial policies and climate abatement scenarios.

Smart Cities, Innovation and Sustainability: Which Role for Cities in Fostering “Green” Entrepreneurship?

This chapter aims at theoretically linking entrepreneurship and institutional conditions in the case of “smart cities”. After discussing how agglomeration economies shape entrepreneurship through the main relevant body of literature, the chapter articulates on the concept of “smart city” and presents a newly collected dataset on a “smart city” for the Emilia-Romagna Region in Northern Italy. Elements that drive improvements in the “smartness” of a city are presented in order to derive policy implications and the theoretical linkages between entrepreneurship, particularly “green” entrepreneurship, and a peculiar case of such an institutional setting as a “smart city”. The absence of proper data to test for a bi-directional causal link between entrepreneurship and smart city is discussed as a limitation of the current analysis and as a research line that deserves further investigation.