Environmental innovations in services: Manufacturing-services integration and policy transmissions

This paper investigates the relevant factors behind the almost unexplored realm of environmental innovation in services, using a dataset of 8161 Italian service firms. Specifically, we test whether manufacturing-services integration matters for environmental innovations. In addition, taking account for the heterogeneity of the service industries, we analyse whether environmental policies for manufacturing transmit ‘induced innovation’ effects to services. Our findings show that: (i) the drivers of environmental innovations related to carbon abatement and energy efficiency differ across industries, and (ii) cooperation, training, environmental management systems and public funding play key roles in these processes. The integration of services and manufacturing through push and pull-effects, and the environmental policy transmission effect from manufacturing to services, generally do not seem to have a positive impact on the diffusion of environmental innovations.