Published in: Research Policy
Cited as: Hoogendoorn, B., P. van der Zwan and R. Thurik (2020). “Goal heterogeneity at start-up: are greener start-ups more innovative?” Research Policy: 104061.
Start-ups differ in the extent to which they introduce innovations to markets and, hence, in their potential contribution to society. Understanding the heterogeneous character of start-ups is key to explaining the variability in innovation. In this study, we explore whether start-ups that place more emphasis on environmental value creation versus economic value creation (‘greener start-ups’) are more innovative. We also examine how environmental regulations at the country level affect this relationship. We theorize that the fundamental difference between economic value creation (private wealth generation, i.e., self-regarding interest) and environmental value creation (environmental gains for society, i.e., other-regarding interest) influences entrepreneurial opportunity identification and exploitation. When considering the regulatory context, we draw on the innovation inducement effect of environmental regulations and expect these regulations to be most effective for entrepreneurs with a strong emphasis on economic value creation. Performing multi-level ordered logit regressions r with 2,945 start-up entrepreneurs in 31 countries (Global Entrepreneurship Monitor data), we find that ‘greener start-ups’ are more likely to engage in product and process innovations. We find some evidence of a positive moderation effect for environmental regulations. We advance research on innovative entrepreneurship by theorizing and finding evidence that other-regarding goals are relevant in explaining start-up innovativeness.
Recommendations from this resource
1. To analyse policy-relevant country variables that influence the association between environmental value creation and innovation.
2. Explore how the effect of environmental regulations on innovation may play out differently for other types of firms such as family firms or nonprofit firms. For example, there is some evidence that the regulatory environment has a different effect on family firms compared to non-family firms as the former are willing to sacrifice economic value to preserve non-economic socio-emotional value such as image and reputation.
Policymakers could actively stimulate a motivation-shaping effect on start-up entrepreneurs through Higher Education programmes.