University of Twente Student Theses


The impact of green innovation on firm financial performance

Hogeslag, M. A. (2020) The impact of green innovation on firm financial performance.

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Abstract:This study investigates the relationship between green innovation and firm performance. The hypothesis states: “green innovation affects firm financial performance positively”. To substantiate this the study uses an unbalanced panel dataset and a sample consisting of 450 unique firms with at least one European granted green patent in one of the total 1,314 firm year observations between the years 2007 and 2014. These firms have a combined number of 7,700 European green patents granted by EPO with its 9,087 citations. In the OLS regression analysis for the full sample, both the number of patents and citations, proxies for green innovation, are positively related to ROE as the firm performance measure. For the number of citations this relationship is also statistically significant at the 1% level. However, looking at ROA as the performance measure, the number of citations still shows a positive and significant sign, but for the number of patents it becomes negative and even significant at the 5% level for some models. For ROS and Profit Margin as the performance measures the regression reports extremely weak results and almost no significance at all for both proxies of green innovation. With these mixed results the hypothesis only receives partial support.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Administration MSc (60644)
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