What are the levers for a transition toward a more sustainable economy? A research note on the drivers of eco-innovation in Europe

Despite the increasing number of studies on eco-innovation, little attention has been paid to some of the drivers of its voluntary implementation. In this research note, we analyze the internal and external drivers of eco-innovation implementation. Drawing upon a unique database comprising information on nearly 40,000 European firms, we estimate a mixed recursive bivariate probit model that allows us to consider separately the inner dynamics of the transition towards sustainable practices and country-specific effects. Our results confirm the importance of both effects, in addition to the significant role of the targeted markets. JEL classification: C35, L21, Q57.