Innovation as a driver of eco-innovation in the firm: an approach from the dynamic capabilities theory

The aim of this study is to investigate how innovative capabilities of the firm affect eco-innovation from a dynamic capability lens. We build on OECD’s (2005) research to conceptualise eco-innovation as the capacity with which firms modify, re-design, and create products, processes, procedures and organisations in order to reduce environmental impact. We propose and test the temporal and relational properties of eco-innovation as a capability. We demonstrate that eco-innovation possesses two properties of innovative capabilities, namely, persistence over time and interrelation with other innovations. We thus shed new light on the mechanism through which firms engage in eco-innovation. We also provide empirical evidence to the debate on the relationship between the ‘normal’ innovation (technological or non-technological) and eco-innovation. We show that eco-innovation and innovation are interrelated both simultaneously and sequentially. Moreover, we show that innovation capabilities and eco-innovation are not only related, but they also have a complementary nature, which facilitates the development of future eco-innovation.