Received: 7 July 2021 Revised: 7 December 2021 Accepted: 21 December 2021

DOI: 10.1002/bse.2986

RESEARCH ARTICLE

Friends or foes? A systematic literature review and meta-

analysis of the relationship between eco-innovation and firm
performance

Lu Zheng1 | Konstantinos Iatridis2

1
School of Economics and Management,
Southeast University, Nanjing, 210096, China
2
School of Management, University of Bath,
Bath, BA2 7AY, UK
Correspondence
Konstantinos Iatridis, School of Management,
University of Bath, Bath, BA2 7AY, UK.
Email: k.iatridis@bath.ac.uk
Abstract
Eco-innovation has gained currency as an effective means of addressing corporate
environmental impacts. Yet the literature is inconclusive as to how different types
of eco-innovation influence different types of firm performance. This is problem-
atic, as practitioners and policymakers will not embrace eco-innovation unless
there is clear evidence that through its implementation companies can achieve
returns, not only on their environmental performance but also on their economic,
social and operational performance. This paper aims to improve our understanding
of this relationship by conducting a meta-analysis and drawing on a much broader
sample than previous meta-analytic efforts in this field. The paper analyses
569 effects based on 160 studies and more than 124,000 firms (N ¼ 124, 077).
Our results provide solid evidence of the positive impact eco-innovation has on all
types of firm performance but also highlight types of eco-innovation that do not con-
tribute to this relationship and the role moderators play in explaining discrepancies
found in the literature.

KEYWORDS
eco-innovation, firm performance, green practices, meta-analysis, sustainability, systematic
literature review

1 | I N T RO DU CT I O N economic, social and operational performance (Bowen et al., 2009;

Climate change presents unprecedented challenges and opportunities
for companies to eco-innovate and reorganize our economies in a
more environmentally friendly way, which supports a greener future
(Insurance Task Force, 2021; United Nations, 2018). On top of that,
regulatory demands, government incentives and public concern for
environmental impacts have been encouraging companies to imple-
ment sustainability-oriented initiatives (Demirel et al., 2018; Iatridis &
Kesidou, 2018). Yet companies will not embrace eco-innovations
unless they think that through their implementation, they can achieve
returns not only on their environmental performance but also on their
Nidumolu et al., 2015).
However, the evidence presented in the literature on the relation-
ship between eco-innovation and different types of firm performance
is not clear. This perplexes practitioners and policymakers and might
make them hesitate to embrace eco-innovations. Specifically,
although the evidence regarding the relationship between eco-
innovation and environmental performance is stronger, albeit not con-
clusive (cf. Anton et al., 2004; Weina et al., 2016), the same does not
apply to economic, social and operational performance, where the evi-
dence is more perplexing (Afum et al., 2021; Banerjee, 2001; Li
et al., 2019; Przychodzen & Przychodzen, 2015; You et al., 2019). On

This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium,
provided the original work is properly cited.
© 2022 The Authors. Business Strategy and The Environment published by ERP Environment and John Wiley & Sons Ltd.

1838 wileyonlinelibrary.com/journal/bse Bus Strat Env. 2022;31:1838–1855.


ZHENG AND IATRIDIS
one hand, there are scholars (Cainelli et al., 2011; de Azevedo
Rezende et al., 2019; Dong et al., 2014; Doran & Ryan, 2012;
Papadopoulos et al., 2017) who argue that eco-innovation influences
economic, social and operational performance positively, but, on the
other hand, there are those who point to a neutral relationship

et al., 2014) and others who argue that eco-
(Amores-Salvado
innovation has a negative influence on economic, social and
operational performance (e.g., Aguilera-Caracuel & Ortiz-
de-Mandojana, 2013; Angelo et al., 2012; Cozijnsen et al., 2000;
Driessen et al., 2013; Zhao et al., 2021).
To gain a better understanding of the relationship between eco-
innovation, including process, product, technological and management
innovations, and different types of firm performance, including eco-
nomic, environmental, operational and social performance, and iden-
tify the reasons for discrepancies in the literature, we conducted a
meta-analysis. ‘Meta-analysis’ has been defined as ‘the statistical
analysis of a large collection of analysis results from individual studies
for the purpose of integrating the findings’ (Glass, 1976, p. 3). It is an
extremely useful tool for establishing empirical generalization and
resolving seemingly contradictory or ambiguous research outcomes.
In contrast to previous meta-analytic approaches, which have
treated eco-innovation or firm performance as unidimensional con-
structs (e.g., Bitencourt et al., 2020; Ghisetti & Pontoni, 2015), we
take a detailed approach to their analysis. Furthermore, our meta-
analysis of 160 studies conducted in 35 countries draws on a much
greater sample than previous meta-analyses of this topic
(e.g., Bitencourt et al., 2020; Hizarci-Payne et al., 2021), and, in doing
so, it offers a broader picture of this topic.
Our findings indicate that the contradictory evidence found in the
literature can be attributed to methodological discrepancies narrowing
the practical implications of this stream of research. Overall, our analy-
sis casts doubts on assertions of a negative influence of eco-innovation
on each type of firm performance. We contribute to the literature by
suggesting that eco-innovation has a positive, albeit moderate, influ-
ence on economic performance; it has the strongest effect on environ-
mental performance; and it has an overall positive effect on operational
and social performance. We also enhance our understanding of the
overall relationship between different types of eco-innovation and dif-
ferent types of firm performance by showing that certain types of eco-
innovation (i.e., eco-technological innovation and eco-management
innovation) do not significantly influence certain types of firm perfor-
mance (i.e., operational and social performance). Finally, we show that
industry sector, size of firms and regional development influence the
relationship between eco-innovation and firm performance.
We begin by examining this relationship in general, before taking
a more detailed approach and discussing how different facets of eco-
innovation relate to different types of firm performance. We then
describe our database development, systematic review and meta-
analysis outcomes. The paper concludes with a discussion of our find-
ings, implications and possible avenues for future research.
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1839
2 | LI T E RA T U R E RE V I E W A N D
HY P O T H E S E S
2.1 | Eco-innovation and firm performance
A multitude of terms are used in extant research to refer to eco-
innovation, the most widely used being ‘green innovation’, ‘envi-
ronmental innovation’ and ‘sustainable innovation’ (e.g., Boons &
Ludeke-Freund, 2013; Ghisetti & Rennings, 2014; Triguero
et al., 2013). The various definitions proposed highlight the minimi-
zation of adverse effects on the environment and the efficient use
of natural resources (Hojnik & Ruzzier, 2016). For instance,
Rennings (2000) argues that eco-innovation encompasses the gen-
eration of new ideas, goods, services, processes or management
systems aimed at reducing environmental pollution. Berrone,
Fosfuri, Gelabert, and Gomez-Mejia (2013, p. 891) define eco-
innovation as ‘the development of products, processes, and ser-
vices aimed at reducing environmental harm by using new methods
for treating emissions, recycling or reusing waste, finding cleaner
energy sources, and so on’. Others have attempted to group the
different facets of eco-innovation and have suggested topics such
as management, process, product and technological innovation
(Tseng et al., 2013) or product, process, organizational and
marketing innovation (Marcon et al., 2017).
We draw on these insights to create the following five-scale divi-
sion of types of eco-innovation: eco-process innovation (EPCI), eco-
product innovation (EPDI), eco-technical innovation (ETI), eco-
management innovation (EMI) and other eco-practices (EP) (see
Table 1). These differentiated eco-innovation categories cover all
aspects mentioned in the literature, while the open-ended category,
other eco-practices, offers the necessary flexibility to address key
aspects of eco-innovation comprehensively.
Despite the conceptual challenge of defining eco-innovation and
its components, eco-innovation features in previous studies as an
important and positive element of all types of firm performance
(Antonioli et al., 2013; Esty & Winston, 2006; Miroshnychenko
et al., 2017; Tang et al., 2018; Xie et al., 2016), with evidence pointing
towards a positive association with economic, environmental, opera-
tional and social performance (Maletič et al., 2016; Varadarajan, 2017;
Xue et al., 2019). Considering this positive evidence, we expect that
overall:
H1. Eco-innovation is positively related to all types of
firm performance.
Given the need to take a detailed approach to analysing the rela-
tionship between eco-innovation and types of firm performance, we
focus next on the relationship between facets of eco-innovation and
their relationship with economic, environmental, operational and
social performance.
 10990836, 2022, 4, Downloaded from https://onlinelibrary.wiley.com/doi/10.1002/bse.2986 by Nat Prov Indonesia, Wiley Online Library on [02/10/2023]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License
1840 ZHENG AND IATRIDIS

TABLE 1 Definition of research constructs

Constructs Definition Coding criteria/examples Representative articles

Process innovation Increase ecological attributes in processes.
Lower energy consumption and
hazardous waste during the production
process.
Product Increase ecological attributes in products.
innovation Introduction of new or significantly
improved products (Chen et al., 2006).
Technological Apply new or significantly improved
innovation technology, which is beneficial to build
an environmentally friendly company.
Management Carry out green projects and suitable
innovation programmes in administration, human
capital, and operation, which effectively
allocate resources and reduce waste
(Tseng et al., 2013).
Other green In addition to the four common green
practices innovations mentioned above, all other
green innovation practices of companies
are listed in this column.
Economic Cost-based performance in the
marketplace that accounts for the cost
of the company (Rubera & Kirca, 2012).
Environmental Reduce damage to the environment and
enhance environmentally friendly
development.
Operational Improve the efficiency of firm operation.
Advance in resource utilization,
production process, and human resource
management.
Social Contribute to other stakeholders of the
company while establishing a better
company image and reputation.
Energy, material and CO2 reduction in
process
Numbers of new eco-product
introductions
IT solutions; green equipment, system
improvement
Service; administration; logistics
innovation
Number of green patents; green marketing
strategy; green business model
innovation
ROA; ROE; EBITDA; revenue growth
Reduction of air emission, waste water,
solid wastes; improvement of
environmental situation
Production cycle time; inventory turns;
reliability, quality, and speed of new
product introductions
Customer loyalty and satisfaction;
employee satisfaction
Ghisetti and Rennings (2014)
Liao (2018)
Przychodzen et al. (2018)
Ebrahimi and Mirbargkar (2017)
de Azevedo Rezende et al. (2019)
Lin et al. (2013); Stanovcic
et al. (2015)
Chiou et al. (2011); Huang and Li
(2017)
Huckman and Zinner (2008);
Ryszko (2016)
Zailani et al. (2015); Iranmanesh
et al. (2017)

2.2 | Eco-innovation and economic performance
There seems to be contradictory evidence for the relationship
between eco-innovation and economic performance. Fernando
et al. (2010) assert that the economic performance of sustainability-
oriented companies is no better than that of environment-neutral
enterprises while eco-strategies are believed not to be conducive to
improving firms' market value. Others (e.g., Li et al., 2019; You
et al., 2019) go a step further and argue that eco-innovation influ-
ences economic performance negatively. For instance, Doran and
Ryan's (2014) analysis of the influence of different types of eco-
process innovation on 2,181 firms indicates that only a minority of
eco-innovations had a positive impact on economic performance.
Such insight mirrors that of others who suggest that eco-innovation is
costly and negatively affects firms' economic performance (Palmer
et al., 1995).
These views notwithstanding, many arguments developed in the
literature suggest a positive relationship (de Azevedo Rezende
et al., 2019). For instance, Porter and van der Linde (1995) argue that
eco-innovation practices entail benefits that are both environmental
(e.g., by reducing pollution and waste) and economic (e.g., by setting
higher prices for eco-products and developing new markets for envi-
ronmental outputs). Similarly, Banerjee (2001) argues that the imple-
mentation of eco-innovation can cut production costs by improving
processes and innovating production through various eco-practices,
thus enhancing economic performance. Accordingly, we hypothesize
the following:
H2a. Eco-innovation is positively related to economic
performance.
H2b. Eco-process innovation (a), eco-product innova-
tion (b), eco-technical innovation (c), eco-management
innovation (d) and other eco-practices (e) are positively
related to economic performance.
2.3 | Eco-innovation and environmental
performance
As one might have expected, the evidence found in previous studies
on the relationship between eco-innovation and environmental

ZHENG AND IATRIDIS
performance is by far more concrete than that focusing on economic
performance. However, the positive nature of the relationship
between eco-innovation and environmental performance is not unani-
mously acknowledged. Anton et al. (2004), for instance, argue that
because eco-process innovations focus mainly on means rather than
ends, their implementation cannot guarantee the improvement of
environmental performance. Similarly, others (Afum et al., 2021;
Chiou et al., 2011; Weina et al., 2016) have suggested that eco-
innovation does not necessarily play an absolutely positive role in
environmental performance.
Nevertheless, the majority of scholars have argued that the adop-
tion of eco-innovation reduces the emission of harmful substances

n-Flores and
(Klassen & Whybark, 1999). For example, Carrio
Innes (2010) studied the environmental performance of eco-
innovation in American manufacturing enterprises by focusing on
toxic gas emissions and found that eco-innovation positively influ-
ences environmental performance. Similarly, del Rosario Reyes-
Santiago et al. (2019) investigated the hotel industry and concluded
that eco-innovation reduces water and electricity usage and waste
disposal, while it also leads to the promotion of organic and local
products. In a similar vein, Xue et al. (2019) argued that eco-
innovation mitigates environmental depletion by addressing topics
such as resource shortages, environmental pollution, ecological dis-
ruption and climate change. Based on this evidence, we hypothesize
the following:
H3a. Eco-innovation is positively related to environ-
mental performance.
H3b. Eco-process innovation (a), eco-product innova-
tion (b), eco-technical innovation (c), eco-management
innovation (d) and other eco-practices (e) are positively
related to environmental performance.
2.4 | Eco-innovation and operational performance
Operational performance refers to the ability to deliver greater flexi-
bility, productivity, lead times and quality (Armbruster et al., 2008).
‘Faced with internal and external pressure to adapt and implement
environmentally friendly business activities, it is becoming increasingly
important for firms to develop green organizational capabilities’
(El-Kassar & Singh, 2019, p. 484).
However, companies will implement eco-practices only when
they think that they can achieve both financial and operational returns
(Bowen et al., 2009). Golicic and Smith (2013) conducted a meta-
analysis and found this to be the case with eco-innovation, as taking
advantage of new eco-techniques can reinforce firms' overall opera-
tional efficiency, leading to economic profit and competitive advan-
tages (Papadopoulos et al., 2017). This is because eco-innovation
facilitates higher resource utilization and better logistics, which allow
organizations to achieve their optimum performance. Further to this,
several empirical studies have strongly demonstrated a positive link
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1841
between eco-innovation and operational performance (Ghisetti &
Rennings, 2014; Klassen & Whybark, 1999; Kushwaha &

pez-Gamero et al., 2009; Wang, 2019). Hence, we
Sharma, 2016; Lo
hypothesize the following:
H4a. Eco-innovation is positively related to operational
performance.
H4b. Eco-process innovation (a), eco-product innova-
tion (b), eco-technical innovation (c), eco-management
innovation (d) and other eco-practices (e) are positively
related to operational performance.
2.5 | Eco-innovation and social performance
The social aspects of eco-innovation also play an important role as
corporations do not operate in vacuum but are in fact indispensable
members of society. Eco-innovation can improve the social perfor-
mance of enterprises by providing environmentally friendly products
that address stakeholders' environmental concerns (Porter & van der
Linde, 1995). This leads to improved relationships with an array of
stakeholders, such as customers, suppliers and local communities
(Montgomery & Ramus, 2011). In turn, such activities bring intangible
benefits to firms as they improve corporate reputation and result in
enhanced legitimacy (Marom, 2006; Montgomery & Ramus, 2011).
For this reason, Doran and Ryan (2012) believe firms are willing to
pay for the promotion of their eco-friendliness despite the initial costs
that approach might entail. Others question the positive influence of
eco-innovation on social performance and argue that the two are
either negatively related (Zhao et al., 2021) or non-related (Afum
et al., 2021). Despite these insights, most scholars argue in favour of a
positive relationship, and we therefore make the following
hypotheses:
H5a. Eco-innovation is positively related to social
performance.
H5b. Eco-process innovation (a), eco-product innova-
tion (b), eco-technical innovation (c), eco-management
innovation (d), and other eco-practices (e) are positively
related to social performance.
2.6 | Moderators
The inconsistency in the results observed in the literature can be
attributed to the influence of factors such as industry type, regional
development, measurement methods and firm size. With reference to
industry, we notice that most researchers have drawn on multi-
industries (e.g., Aboelmaged & Hashem, 2019; Palmer &
Truong, 2017; Xing et al., 2019), with some taking a single industry
perspective, mainly focusing on manufacturing (Chen & Liu, 2018;

1842
Stanovcic et al., 2015; Tariq et al., 2019) and on the service sector
(Aboelmaged, 2018; Chang, 2018). As far as geographical region is
concerned, most previous studies have focused on either developed
(e.g., Lee & Kim, 2017; Saunila et al., 2018) or developing countries
(e.g., Fernando et al., 2019; Zhang & Yang, 2016), while a variety of
approaches is also observed in the measurement methods used
(e.g., Chan et al., 2016; Li et al., 2017; Wu, 2017).
Given the diversity of approaches adopted by previous studies, it
is reasonable to assume that methodological artefacts might contrib-
ute to the observed variation in the relationship between firm perfor-
mance and eco-innovation. In addition, several meta-analysis articles
on eco-innovation highlight firm size as a factor influencing the per-
formance of eco-innovation practices (Zubeltzu-Jaka et al., 2018). The
sampling approaches of previous studies have varied, with some
focusing on large, listed enterprises (e.g., Miroshnychenko et al., 2017;
Tariq et al., 2019) and others opting for small and medium-sized
enterprises (SMEs) (e.g., Aboelmaged & Hashem, 2019; Ebrahimi &
Mirbargkar, 2017).
Figure 1 illustrates the research framework of our meta-analysis.
3 | DATABASE DEVELOPMENT
3.1 | Data collection
The timeframe of our study includes all papers published until August
2021. A systematic literature review was conducted on published aca-
demic research under the procedure of selection and analysis
(de Medeiros et al., 2014). Denyer and Tranfield (2009) recommended
a five-step scheme: question formulation; locating studies; study
selection and evaluation; analysis and synthesis and reporting and
FIGURE 1 Research framework
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ZHENG AND IATRIDIS
using results. As it has been widely used in the management literature
(Hallinger, 2013), we adopted this method to map and synthesize the
linkages between eco-innovation and firm performance. This
approach is also in accordance with previous research on eco-
innovation (de Jesús Pacheco et al., 2016; García-Granero
et al., 2018). In our approach, we used the following parameters:
a. We searched for relevant papers in databases such as Web of Sci-
ence, ProQuest, Elsevier and Emerald. Since eco-innovation is a
very broad term, we tried to cover as many keywords as possible,
reaching 30 in total.1 To capture firm performance, we used the
following keywords: performance, consequence, benefit, advan-
tage and outcome.
b. R-family effects (i.e., correlation, chi-square, p value, and t value),
standardized regression coefficients, and sample size needed to be
reported explicitly.
c. The research design had to be clearly described, the variables used
clearly defined and the construction term reasonable.
d. When several articles had been published using the same sample,
only one was included.
e. In cases where two or more individual samples were presented in a
single study, we coded them separately.
Due to the significant number of eco-innovation-related keywords,
we initially identified an enormous number of studies through various
algorithms that matched our keywords. Of these, we excluded studies
that did not provide quantitative results, did not investigate the eco-
innovation/firm performance relationship or did not present credible
information on effect size. Then, we also excluded several articles that
were not included in the Academic Journal Guide (AJG) 2021. The
AJG is a widely used and respected guide to the journals in which

ZHENG AND IATRIDIS
business and management academics publish their research. In the
end, we had a total of 569 effects (N ¼ 124,077) nested in 160 inde-
pendent studies. The inclusion rate is 3.55%. Although the screening
rate is low, the number of studies and effects obtained in absolute
value compares well with other meta-analyses in the eco-innovation
field. We identified all effect-size estimates for each combination of
eco-innovation type and performance variable and also collected addi-
tional details such as the year of publication, analysis methods used
and geographic location of data sources. These articles are available
upon request.
3.2 | Data coding
Table 1 illustrates the definition and coding criteria for the selected
variables. It includes information about the author/s, publication year,
sample size, country and industry. To minimize coding errors, two
doctoral students repeated the coding procedure, while a third stu-
dent checked the codes and highlighted any differences. These were
resolved after a discussion between all individuals involved in this
process.
3.3 | Effect size
In this study, we adopted the meta-analysis data processing method
of Hunter and Schmidt (2004). We followed the steps ‘extract, trans-
form, standardize’: First, from the included articles, we extracted sta-
tistics, such as Pearson's coefficient (r value), t value, F value and chi-
square. Next, we converted these statistics into correlation coefficient
r value. For the few studies which only provided standardized regres-
sion coefficients (β), similarly with previous meta-analyses
(e.g., Erauskin-Tolosa et al., 2020; Wagner et al., 2015), we adopted
the method proposed by Peterson and Brown (2005) and transformed
them into correlation coefficients. Finally, the Fisher's transformation
of Pearson's coefficient (r value) was carried out, while the Fisher's
z value obtained was taken as the final effect value. The effect size
and sampling variance can be calculated by Formulas 1 and 2.
 
0 1þr
Fisher s ¼ 0:5ln , ð1Þ
1r
1
σ ¼
2
, ð2Þ
n3
where r is Pearson's correlation coefficient and n is the sample size
for r. Both fixed-effect and random-effect models can be employed
when using meta-analysis (Borenstein et al., 2009). According to
Lajeunesse (2013), in addition to random sampling changes, there is
also true variation in the effects between studies. The similarity of
multiple independent studies is the premise of comprehensive analy-
sis, and the existence of heterogeneity is the foundation for meta-
analysis. Therefore, the results of this study need to maintain
10990836, 2022, 4, Downloaded from https://onlinelibrary.wiley.com/doi/10.1002/bse.2986 by Nat Prov Indonesia, Wiley Online Library on [02/10/2023]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License
1843
moderate heterogeneity for meta-analysis. We adopt a random-effect
model in this paper to eliminate its influence and ensure the conclu-
sion of reliable meta-analysis.
4 | SYSTEMATIC REVIEW
The systematic review drew on the following criteria: (1) year of publi-
cation, (2) study region, (3) industry type, (4) measurement method,
(5) distribution of papers across journals and (6) analysis method. This
field witnessed a dramatic increase from 2014 to 2021, with
153 papers published in that period, while the earliest traceable litera-
ture meeting the criteria of our meta-analysis was published by
Chen (2008). Regarding the geographical region, most publications in
this field come from China (N = 59) and Taiwan (N = 9), reflecting
researchers' interest in addressing the environmental impacts related
to these economies' significant economic growth. Besides, some liter-
ature (e.g., de Azevedo Rezende et al., 2019; García-Sánchez
et al., 2020; Li et al., 2018; Miroshnychenko et al., 2017) collected
data from more than one geographical region (N = 25).
The industry type receiving the most attention was manufactur-
ing (N = 66), while a significant number of previous studies (N = 73)
drew their samples from more than one sector. Measurement method
is divided into two approaches, primary data collected via surveys and
secondary data collected via databases, accounting for 109 papers
and 51 papers, respectively. Table 2 presents the journals that have
published research in eco-innovation and corporate performance,
along with their quality rating (QR). Regression analysis was applied to
analyse the empirical data in most reviewed papers (57%), followed by
covariance-based structural equation modelling (CB-SEM) (22%) and
partial least squares structural equation modelling (PLS-SEM) (16%).
5 | META-ANALYSIS
5.1 | Eco-innovation-firm performance relationship
Following the screening of the papers selected during the systematic
review, our meta-analysis resulted in 160 empirical articles published
from 2008 to August 2021. Tables 3–5 illustrate the meta-analysis
results and pair these with this paper's hypotheses. According to pre-
vious studies (Cohen & Cohen, 1983), a correlation effect size less
than 0.10 is considered weak, 0.10–0.30 moderate and greater than
0.30 strong. We followed these guidelines to assess the strength of
the relationships between our variables.
Table 3 displays the results of the meta-analysis, including effect
values at different levels of each classification variable and the test
for moderators based on one level. First, we conducted models for
various dimensions of eco-innovation and firm performance, differen-
tiating where significant distinctions existed between various aspects.
Our findings reveal that whichever eco-innovation or firm perfor-
mance dimensions are examined, the significantly positive relationship
remains unchanged. Among them, EPDI has the strongest positive
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1844 ZHENG AND IATRIDIS

TABLE 2 Number of papers by journal

Journal name Freq. QRa Percent

Journal of Cleaner Production 43 2 26.88
Business Strategy and the Environment 29 3 18.13
Technological Forecasting and Social Change 8 3 5.00
Corporate Social Responsibility and Environmental 7 1 4.38
Management
Journal of Business Ethics 6 3 3.75
International Journal of Production Economics 4 3 2.50
Journal of Environmental Management 4 3 2.50
Sustainability Accounting, Management and Policy 4 2 2.50
Journal
European Journal of Innovation Management 3 1 1.88
Journal of Manufacturing Technology Management 3 1 1.88
IEEE Transactions on Engineering Management 2 3 1.25
Industrial Management and Data Systems 2 2 1.25
Industrial Marketing Management 2 3 1.25
Journal of Knowledge Management 2 2 1.25
Management Decision 2 2 1.25
Organization and Environment 2 3 1.25
Academia Revista Latinoamericana de 1 1 0.63

n
Administracio
Asia Pacific Journal of Management 1 3 0.63
Baltic Journal of Management 1 1 0.63
Business Ethics 1 2 0.63
Ecological Economics 1 3 0.63
Economics of innovation and new technology 1 2 0.63
Energy Policy 1 2 0.63
Environmental and Resource Economics 1 3 0.63
Eurasian Business Review 1 2 0.63
Euromed Journal of Business 1 1 0.63
European Journal of Marketing 1 3 0.63
European Management Journal 1 2 0.63
Information Systems Management 1 2 0.63
Innovation: Organization & Management 1 2 0.63
International Journal of Contemporary Hospitality 1 3 0.63
Management
International Journal of Hospitality Management 1 3 0.63
International Journal of Innovation Management 1 2 0.63
International Journal of Lean Six Sigma 1 1 0.63
International Journal of Logistics Management 1 1 0.63
International Journal of Physical Distribution and 1 2 0.63
Logistics Management
International Journal of Production Research 1 3 0.63
Journal of Business & Industrial Marketing 1 2 0.63
Journal of Business Research 1 3 0.63
Journal of Engineering and Technology Management 1 2 0.63
Journal of Management Accounting Research 1 2 0.63
Journal of Marketing Theory and Practice 1 2 0.63
Journal of Product Innovation Management 1 4 0.63
 10990836, 2022, 4, Downloaded from https://onlinelibrary.wiley.com/doi/10.1002/bse.2986 by Nat Prov Indonesia, Wiley Online Library on [02/10/2023]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License
ZHENG AND IATRIDIS 1845

TABLE 2 (Continued)

Journal name Freq. QRa Percent

Journal of Purchasing and Supply Management 1 3 0.63
Kybernetes 1 1 0.63
Management of Environmental Quality 1 1 0.63
R&D Management 1 3 0.63
Review of managerial Science 1 2 0.63
Service Industries Journal 1 2 0.63
Small Business Economics 1 3 0.63
Technology Analysis and Strategic Management 1 2 0.63
Total Quality Management and Business Excellence 1 2 0.63
Transportation Research Part D 1 3 0.63
a
Quality Rating according to the Academic Journal Guide 2021 (AJG).

TABLE 3 Results of meta-analysis

95% CI
Test for moderators
k N ES s.e. z Lower Upper Z test P value QM (df)
Eco-innovation measure
EI-process 123 87,405 0.335*** 0.03 11.7 0.279 0.391 Reference category 9.31(4)
***
EI-product 110 104,859 0.416 0.03 13.9 0.357 0.474 1.93 0.052
EI-technological 28 10,796 0.278*** 0.06 4.5 0.156 0.400 0.83 0.404
***
EI-management 103 44,343 0.399 0.03 12.4 0.336 0.462 1.49 0.137
EI-practices 226 161,290 0.331*** 0.02 15.6 0.289 0.372 0.12 0.902
Firm performance measure
Economic 298 317,056 0.215*** 0.02 12.7 0.181 0.248 Reference category 145.70(3)***
*** ***
Environmental 132 42,216 0.532 0.03 20.8 0.482 0.582 10.36 0.000
Operational 115 31,902 0.448*** 0.03 16.5 0.395 0.501 7.30 0.000***
***
Social 55 20,039 0.513 0.04 13.4 0.438 0.588 7.13 0.000***
Industry
Manufacturing 219 85,166 0.404*** 0.02 19.2 0.363 0.445 Reference category 10.12(2)**
Service 94 17,337 0.306*** 0.03 9.5 0.242 0.369 2.55 0.011*
Various 250 301,102 0.325 ***
0.02 16.5 0.286 0.363 2.76 0.006**
Region
Developing 339 171,064 0.404*** 0.02 24.1 0.372 0.438 Reference category 24.18(2)***
Developed 147 155,900 0.319*** 0.03 12.6 0.269 0.369 2.79 0.005**
Worldwide 83 77,641 0.230 ***
0.03 6.6 0.161 0.297 4.60 0.000***
Measurement
Database 167 260,352 0.077*** 0.02 3.6 0.035 0.118 Reference category 237.24(1)***
Survey 402 144,253 0.464*** 0.01 35.1 0.438 0.490 15.40 0.000***
Data type
Cross-sectional 426 151,894 0.449*** 0.01 34.2 0.423 0.474 Reference category 205.52(1)***
Panel 143 252,711 0.064 **
0.02 2.7 0.018 0.110 14.34 0.000 ***

Company size
Large 210 257,297 0.165*** 0.02 8.1 0.125 0.205 Reference category 137.06(2)***
SMEs 58 23,766 0.492*** 0.04 12.9 0.417 0.567 7.57 0.000***
***
Various 300 123,337 0.452 0.02 28.0 0.420 0.484 11.08 0.000***

Note: *, **, *** represent the level of significance of coefficients at p < 0.01, p < 0.005 and p < 0.001 respectively.
 10990836, 2022, 4, Downloaded from https://onlinelibrary.wiley.com/doi/10.1002/bse.2986 by Nat Prov Indonesia, Wiley Online Library on [02/10/2023]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License
1846 ZHENG AND IATRIDIS

TABLE 4 Impact of eco-innovation on firm performance under the random-effect model

95% CI

Proposed relationships k N ES s.e. z Lower Upper Q I2 FS H

EI-process ! economic 64 70,471 0.181 ***
0.033 5.5 0.116 0.245 2,620.1 ***
98.56 9,771 H2b (a)
EI-product ! economic 64 90,988 0.282 ***
0.045 6.3 0.194 0.369 4,385.3 ***
99.38 36,346 H2b (b)
EI-technological ! economic 17 8,971 0.144* 0.063 2.3 0.020 0.268 295.5*** 96.82 563 H2b (c)
EI-management ! economic 38 25,775 0.247 ***
0.041 6.1 0.167 0.326 1,057.4 ***
97.41 6,621 H2b (d)
EI-practices ! economic 125 122,899 0.197*** 0.024 8.2 0.149 0.244 4,304.1*** 98.46 69,145 H2b (e)
Eco-innovation ! economic 298 317,056 0.203 ***
0.016 12.6 0.171 0.234 9,504.1 ***
98.7 376,626 H2a
EI-process ! environmental 24 8,955 0.507*** 0.052 9.8 0.405 0.608 289.5*** 94.97 15,363 H3b (a)
EI-product ! environmental 20 7,704 0.589 ***
0.061 9.6 0.469 0.709 267.6 ***
95.53 13,616 H3b (b)
EI-technological ! 9 1,559 0.492*** 0.107 4.6 0.282 0.702 155.9*** 94.17 1,148 H3b (c)
environmental
EI-management ! 30 11,325 0.573*** 0.060 9.6 0.456 0.690 887.9*** 97.12 36,415 H3b (d)
environmental
EI-practices ! environmental 54 13,419 0.508*** 0.042 12.1 0.426 0.590 1,175.6*** 95.58 62,531 H3b (e)
Eco-innovation ! 132 42,216 0.533 ***
0.026 20.6 0.482 0.583 3,125.4 ***
96.25 500,647 H3a
environmental
EI-process ! operational 28 6,537 0.462*** 0.060 7.7 0.344 0.580 514.1*** 95.44 12,413 H4b (a)
EI-product ! operational 20 5,112 0.548 ***
0.051 10.8 0.449 0.648 256.1 ***
92.19 10,131 H4b (b)
EI-technological ! 2 1,207 0.022 0.034 0.8 0.039 0.078 1.7 52.46 31 H4b (c)
operational
EI-management ! operational 30 6,278 0.366*** 0.051 7.2 0.267 0.465 397.1*** 93.63 10,208 H4b (d)
EI-practices ! operational 41 14,064 0.448 ***
0.054 8.3 0.342 0.554 1,638.4 ***
97.57 33,101 H4b (e)
Eco-innovation ! operational 115 31,902 0.435*** 0.028 15.4 0.380 0.490 2,754.4 95.92 219,432 H4a
EI-process ! social 15 3,008 0.485 ***
0.090 5.4 0.309 0.661 307.6 ***
95.79 3,623 H5b (a)
EI-product ! social 17 3,291 0.568*** 0.104 5.4 0.364 0.773 581.8*** 97.16 6,324 H5b (b)
EI-technological ! social 2 644 0.122 0.058 0.7 0.314 0.540 3.8 50.98 37 H5b (c)
EI-management ! social 5 1,528 0.206 0.083 1.2 0.172 0.490 60.4*** 88.19 56 H5b (d)
EI-practices ! social 21 13,084 0.447 ***
0.069 6.5 0.312 0.581 771.8 ***
97.83 7,062 H5b (e)
Eco-innovation ! social 55 20,039 0.485*** 0.047 10.4 0.393 0.576 2,039.1*** 97.40 52,517 H5a
*** ***
Overall relation 569 404,605 0.332 0.014 24.3 0.305 0.359 10,033.7 98.62 3,442,909 H1

Note: *, **, *** represent the level of significance of coefficients at p < 0.01, p < 0.005 and p < 0.001 respectively.

overall impact on firm performance (r ¼ 0:416, p ¼ 0:000), and envi-
ronmental performance is the firm performance aspect most affected
by eco-innovation (r ¼ 0:532, p ¼ 0:000). Furthermore, the test for
moderators indicates that EPCI is not significantly different from the
other four types of eco-innovation while the difference in effect size
is statistically significant between economic performance and the
other three performance types. As for moderator variables, we found
that all have significant statistical significance and the effect sizes cal-
culated for each subgroup (industry, region, measurement, data type
and company size) are significantly different from each other.
Specifically, manufacturing industry (r ¼ 0:404, p ¼ 0:000), studies in
developing regions (r ¼ 0:404, p ¼ 0:000), experimental method of
survey (r ¼ 0:464, p ¼ 0:000), cross-sectional experimental
(r ¼ 0:449, p ¼ 0:000) and SME enterprises (r ¼ 0:492, p ¼ 0:000)
show the most significant overall positive relationship between eco-
innovation and firm performance.
Table 4 presents the heterogeneity test for all proposed relation-
ships, including Q-statistics, p value, z value and hypotheses. As
shown, most results demonstrate that residuals are heterogeneous
and moderators can be introduced to further explore the link between
eco-innovation and firm performance, except that between ETI and
operational performance and that between ETI and social perfor-
mance. Overall, the relation test reveals that 98.62% of the observed
variation in effect size can be attributed to systematic cross-samples
variability and only 1.38% of the observed variation was due to ran-
dom error.
When sample test results are heterogeneous, there are usually
two processing methods: (1) Remove the extreme effect value, and
data then conduct the fixed effect model analysis, and (2) adopt the
random-effect model to analyse the variation within and between
groups (Cano et al., 2004). Thus, our hypotheses were verified, except
for hypotheses H4b (c), H5b (c), and H5b (d). Since the singular value
 TABLE 5 Result of subgroup analysis under the mixed-effect model

Industry type Regional development3 Measurement method Company size

Proposed relationships Manufacturing Service Multiple Developing Developed Database Survey Large SMEs Various
*** ** *** * *** **
EI-process ! economic 0.317 (24) 0.062 (3) 0.095 (34) 0.264 (36) 0.079 (18) 0.057 (28) 0.284 (34) 0.081 (33) 0.223 (5) 0.312 (23)***
ZHENG AND IATRIDIS

EI-product ! economic 0.453 (27)*** – 0.137 (32)*** 0.380 (41)*** 0.147 (13)** 0.040 (26) 0.460 (36)*** 0.079 (31)** 0.755 (3)** 0.445 (27)***
* **
EI-technological ! economic 0.124 (4) 0.589 (1) 0.070 (9) 0.114 (10) 0.202 (5) 0.031 (9) 0.326 (6) 0.051 (10) 0.017 (1) 0.508 (3)***
EI-management ! economic 0.250 (6)*** 0.240 (8) ** 0.235 (20)*** 0.261 (18)*** 0.291 (14)*** 0.001 (13) 0.395 (23)*** 0.022 (15) 0.290 (3)*** 0.436 (17)***
*** *** *** *** *** *** *** ** **
EI-practices ! economic 0.263 (39) 0.233 (20) 0.145 (62) 0.257 (52) 0.183 (41) 0.062 (72) 0.387 (51) 0.060 (70) 0.379 (9) 0.374 (43)***
EI ! economic 0.290 (98)*** 0.223 (37)*** 0.138 (157)*** 0.263 (152)*** 0.176 (95)*** 0.046 (149)*** 0.364 (147)*** 0.061 (160)*** 0.357 (25)*** 0.372 (110)***
*** ** *** *** ** *** *** ***
EI-process ! environmental 0.457 (11) 0.271 (4) 0.743 (6) 0.507 (17) 0.492 (1) – 0.506 (22) 0.479 (6) 0.613 (2) 0.499 (13)***
EI-product ! environmental 0.509 (11)*** – 0.718 (6)*** 0.590 (15)*** – – 0.588 (17)*** 0.530 (2)*** 0.682 (3)*** 0.574 (11)***
* *** * *** ***
EI-technological ! environmental 0.225 (3) 0.704 (3) – 0.327 (4) 0.704 (3) – 0.492 (8) – 0.054 (1) 0.668 (5)***
EI-management ! environmental 0.479 (8)*** 0.491 (9)*** 0.736 (9)*** 0.461 (17)*** 0.801 (8)*** 0.961 (2)*** 0.526 (25)*** 0.868 (5)*** 0.315 (3)* 0.532 (18)***
*** *** *** *** *** *** *** ***
EI-practices ! environmental 0.450 (31) 0.243 (6) 0.773 (11) 0.533 (40) 0.492 (6) – 0.504 (51) 0.559 (8) 0.536 (8) 0.487 (34)***
EI ! environmental 0.453 (68)*** 0.411 (24)*** 0.754 (37)*** 0.514 (97)*** 0.664 (20)*** 0.784 (5)*** 0.520 (125)*** 0.597 (25)*** 0.490 (21)*** 0.523 (83)***
** *** *** *** *** *** ***
EI-process ! operational 0.373 (7) 0.322 (4) 0.525 (12) 0.433 (18) 0.623 (1) 0.083 (2) 0.511 (23) 0.543 (3) 0.668 (6) 0.448 (22)***
EI-product ! operational 0.621 (4)*** 0.332 (4) 0.498 (13)*** 0.583 (13)*** – – 0.576 (18)*** 0.266 (1) – 0.580 (17)***
EI-technological ! operational – – – – – – – – – –
EI-management ! operational 0.414 (1)*** 0.190 (14)* 0.554 (12)*** 0.210 (12)* 0.473 (12)*** – 0.366 (29)*** – – 0.362 (28)***
EI-practices ! operational 0.462 (16)*** 0.353 (12)*** 0.524 (11)*** 0.523 (25)*** 0.379 (9)*** 0.002 (4) 0.509 (36)*** 0.187 (7) 0.697 (5)*** 0.470 (27)***
EI ! operational 0.414 (28)*** 0.274 (32)*** 0.525 (50)*** 0.435 (70)*** 0.445 (25)*** 0.029 (8) 0.470 (105)*** 0.301 (13)*** 0.668 (6)*** 0.438 (93)***
*** *** *** *** *** *** ***
EI-process ! social 0.453 (9) – 0.484 (3) 0.489 (10) 0.511 (2) – 0.485 (14) 0.430 (3) 0.575 (1) 0.452 (7)**
EI-product ! social 0.576 (11)*** 0.027 (1) – 0.582 (12)*** 0.577 (2)*** – 0.568 (16)*** – 0.829 (2)*** 0.495 (11)***
EI-technological ! social – – – – – – – – – –
EI-management ! social 0.716 (2)*** – 0.575 (3)*** 0.636 (3)*** 0.780 (1)*** – 0.636 (5)*** – – 0.632 (4)***
EI-practices ! social 0.427 (10)*** 0.487 (4)*** 0.380 (3)** 0.520 (11)*** 0.356 (7)*** 0.071 (1)*** 0.488 (18)*** 0.371 (5)*** – 0.393 (12)***
EI ! social 0.470 (32)*** 0.487 (4)*** 0.493 (15)*** 0.499 (35)*** 0.479 (15)*** 0.071 (1)*** 0.501 (52)*** 0.398 (11)*** 0.839 (6)*** 0.435 (34)***

Note: (1) The entries give the mean effects for each level of moderators, with the degree of freedom in parentheses. When the degree of freedom for one level of the moderator is less than 1, we do not conduct the test,
and we operationally use a dash () to indicate that (2) *, ** and *** represent the level of significance of coefficients at p < 0.01, p < 0.005 and p < 0.001, respectively. 3. The classification of regional development is based on
the latest results of the United Nations.
1847

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1848 ZHENG AND IATRIDIS

has been reserved in this paper, the random-effects model analysis (r ¼ 0:022, p > 0:1). Therefore, hypothesis H4b was only partially
method is considered. The significant results of the heterogeneity supported. Out of the other types of eco-innovation, EPDI contrib-
analysis confirmed the use of the random-effects model for meta- uted the most (r ¼ 0:548, p ¼ 0:000), followed by EPCI
analysis, which also provided a huge impetus for us to examine the (r ¼ 0:462, p ¼ 0:000), EP (r ¼ 0:448, p ¼ 0:000) and EMI
impact of potential moderating factors on the relationship between (r ¼ 0:366, p ¼ 0:009).
firm performance and eco-innovation.
Moreover, as illustrated in Table 4, all proposed relationships
were examined under the random-effects model, and we began to 5.1.4 | Eco-innovation and social performance
make a detailed explanation of the most influential structure,
focusing on the aggregated results of all eco-innovations. Our find- This domain has the smallest research sample, with 55 effects. Over-
ings clearly demonstrate that the link between eco-innovation and all, we found that the correlation between eco-innovation and social
firm performance is strong and significant (r ¼ 0:332,p ¼ 0:000). performance was the second most significant (r ¼ 0:485, p ¼ 0:000),
Finally, we used subgroup analysis to observe how moderators with EPDI (r ¼ 0:568, p ¼ 0:000) contributing the most, followed by
influence our results. EPCI (r ¼ 0:485, p ¼ 0:000) and EP (r ¼ 0:447, p ¼ 0:000). However,
ETI (r ¼ 0:122, p > 0:1) and EMI (r ¼ 0:206, p > 0:1), with a sample of
two effects and five effects, respectively, did not significantly impact
5.1.1 | Eco-innovation and economic performance social performance, demonstrating that hypothesis H5b is partially
supported.
As we can see from Table 4, this group has the largest sample of the
selected indicators with 298 effects, accounting for more than half of
the total effects. This comes as no surprise, given scholars' interest in 5.2 | Subgroup analysis
proving this link in order to make eco-innovation practices more
alluring to managers. Although we found a positive relationship As reported in Table 4, the test for residual heterogeneity is signifi-
between the two, it is worth noting that eco-innovation shapes cant among the primary studies included in our sample, pointing to
economic performance only moderately and its association is weaker moderators to explain conflicting results in previous studies. Tables 3
than all other aspects of firm performance (r ¼ 0:203, p ¼ 0:000). and 5 illustrate the influence of industry type, regional development,
Our results indicate that economic performance benefits measurement methods and firm size. With reference to industry, we
the most from EPDI (r ¼ 0:282, p ¼ 0:000), followed by found that eco-innovation has a higher impact in manufacturing
EMI ðr ¼ 0:247, p ¼ 0:000Þ, EP ðr ¼ 0:197, p ¼ 0:000Þ, EPCI ðr ¼ 0:181, (r ¼ 0:404, p < 0:001) than in service firms (r ¼ 0:306, p < 0:001).
p ¼ 0:000Þ, and ETI ðr ¼ 0:144, p < 0:01Þ. However, this concerns the impact on firms' economic, operational
and environmental performance. When it comes to social
performance, the influence of eco-innovation is higher in service
5.1.2 | Eco-innovation and environmental firms (r ¼ 0:487, p < 0:001) than in manufacturing firms
performance (r ¼ 0:470, p < 0:001).
As far as the influence of regional development on eco-innovation
As expected, eco-innovation has the most significant effect on envi- is concerned, we found a positive relationship between eco-
ronmental performance (r ¼ 0:533, p ¼ 0:000), with 132 effects and innovation and firm performance in both developing
42,216 sample sizes. All types of eco-innovations showed a positive (r ¼ 0:404, p < 0:001) and developed (r ¼ 0:319, p < 0:001) countries
and significant impact on environmental performance, supporting and regions. We observed a significant divergence in the influence of
both hypotheses H3a and H3b. EPDI (r ¼ 0:589, p ¼ 0:000) contrib- eco-innovation on economic performance between developing
uted the most, followed by EMI (r ¼ 0:573, p ¼ 0:000), EP (r ¼ 0:262, p < 0:001) and developed regions (r ¼ 0:176, p < 0:001), and
(r ¼ 0:508, p ¼ 0:000), EPCI (r ¼ 0:507, p ¼ 0:000) and ETI we also found the relationship with social performance slightly
(r ¼ 0:492, p ¼ 0:000). stronger in developing (r ¼ 0:499, p < 0:001) than developed
regions (r ¼ 0:479, p < 0:001). In contrast, as Table 5 illustrates, the
impact of eco-innovation on environmental and operational perfor-
5.1.3 | Eco-innovation and operational performance mance is higher in developed (r = 0.6642, p < 0.001 and r = 0.445,
p < 0.001, respectively) than developing regions (r = 0.514, p < 0.001
The relationship between eco-innovation and operational perfor- and r = 0.435, p < 0.001, respectively).
mance had significant impact on firm operational outcomes With regard to the use of different methods, we found that previ-
ðr ¼ 0:435, p ¼ 0:000), with 115 effects. However, unlike the preced- ous studies drawing on surveys to explore the relationship between
ing two categories, not all types of eco-innovation were found to eco-innovation and firm performance have yielded more significant
influence operational performance, and due to the extremely small results (r ¼ 0:464, p < 0:001) than studies using databases
reference sample size, the impact of ETI was not significant (r ¼ 0:077, p < 0:001).

ZHENG AND IATRIDIS
FIGURE 2 Funnel plot. Note: Solid circles are original data, and the open circles represent the suspected missing effects
Regarding firm size, the selected samples were categorized into
those covering large companies, those focusing on SMEs and those
involving firms of all sizes. As shown in Table 3, eco-innovation signifi-
cantly and positively influences firm performance, irrespective of a
firm's size. Surprisingly, the effect is stronger for SMEs
(r ¼ 0:492,p ¼ 0:000) than large companies (r ¼ 0:165,p ¼ 0:001) and
companies of all sizes (r ¼ 0:452,p ¼ 0:000). Table 5 provides more
detailed comparisons in each subcategory. Eco-innovation influences
economic, operational and social performance more positively in
SMEs than in large companies. In contrast, the influence of eco-
innovation on environmental performance is higher in large companies
(r ¼ 0:597,p ¼ 0:000) than SMEs (r ¼ 0:490,p ¼ 0:000).
5.3 | Bias test
In line with Duval and Tweedie's (2000) approach, we used the trim-
and-fill method to diagnose our model and determine the reliability of
the results. Sensitivity analysis concludes that the funnel is not sym-
metrical, and 68 effects should have been included (see Figure 2).
However, the new combined model, with the same direction and
slightly stronger positive results (r ¼ 0:392, p < 0:001), shows that the
publication bias of this study had little impact and the results were
robust. Additionally, the fail-safe number in our study (N ¼ 3,442,909)
is well above the threshold (N ¼ 2,855), indicating the high reliability
of our meta-analysis.
6 | DISCUSSION AND CONCLUSIONS
Driven by contradictory evidence presented in previous studies and
by the need to make our economies more environmentally friendly,
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1849
our meta-analysis explored the existing literature on eco-innovation
and firm performance. Through a systematic literature review, we
analysed 160 articles published from 2008 to August 2021, generat-
ing 569 effect sizes and a total of 124,077 independent samples. In
contrast with previous meta-analytical approaches, we did not treat
eco-innovation and firm performance as unidimensional constructs
but delved into five different types of eco-innovation and four differ-
ent types of firm performance. Our detailed classification of eco-
innovation and firm performance, as well as the inclusion of exoge-
nous factors in our analysis, allows us to understand this relationship
better.
6.1 | The non-linear influence of eco-innovation
on firm performance
The results from our meta-analysis illustrate the generally positive
relationship between different types of eco-innovation and different
types of firm performance but also highlight that the relationship is
not always linear. For instance, our detailed analytical approach dem-
onstrates that eco-technological innovation does not influence opera-
tional performance, an interesting finding that contributes to the
literature discussing technology push as a main trigger of eco-
innovation (Jové-Llopis & Segarra-Blasco, 2020; Zubeltzu-Jaka
et al., 2018). This non-significant relationship might be attributed to
the long-term nature of this type of eco-innovation, limiting its poten-
tial to influence operational efficiency in the short or medium term
(Cozijnsen et al., 2000). The finding has significant implications for
practitioners interested in adopting eco-technology innovation activi-
ties as a means of improving their environmental performance, and it
also contributes to previous studies investigating eco-technology


innovation (Alvarez Jaramillo et al., 2019; Wicki & Hansen, 2019) and

1850
eco-innovations and technology investment (Oh et al., 2020). This
may be an important finding for firm survival in the long term
(March, 1991), but the non-significant relationship might be a sub-
stantial barrier because, during the initial stages of its adoption, eco-
technology innovation might not lead to competitive advantage as
argued by previous studies (Jenkins, 2009). Acquiring a competitive
advantage through eco-technology innovation is most likely to be
subject to adopters' ability to learn to adapt to the requirements of
eco-technology innovation (Siebenhüner & Arnold, 2007) and adjust
or renew their capabilities (Demirel & Kesidou, 2019). Given eco-inno-
vation's key role in transforming economic activities and making them
more circular and environmentally friendly, this finding also contrib-
utes to studies (Kiefer et al., 2021; Scarpellini et al., 2020) investigat-
ing the use of eco-technology innovation to promote circular
economy.
The non-linear relationship between eco-innovation and specific
types of firm performance is mirrored in our findings on social perfor-
mance. Although we found, as expected, a positive relationship over-
all, which can be attributed to firms' awareness of the social
implications of their eco-initiatives (Sarkis, 2001) and their willingness
to showcase the eco-initiatives they undertake to their stakeholders
(Presley et al., 2007), our results paint a more complex picture. The
non-significant relationship between eco-technology and eco-
management innovation suggests that firms trying to enhance their
social performance through eco-innovation without hurting their eco-
nomic performance should be very careful about what type of eco-
innovation they choose. If they want to do so in the short or medium
term, choosing one of the two types of eco-innovation would not be
wise as it is unlikely to lead to complementary effects on the likeli-
hood of external stakeholders' engagement (Acebo et al., 2021).
Of all four types of performance included in our analysis, eco-
nomic performance has the weakest, though still positive, relationship
with eco-innovation. This result is in line with previous studies on the
positive correlation between eco-innovation and economic perfor-
mance (e.g., Kushwaha & Sharma, 2016; Liao, 2018). Our finding that
this relationship is likely to be moderate might be explained by the
fact that eco-process innovation and other eco-innovation practices
do not contribute as positively as other types of eco-innovation
do. This might be due to the time needed before eco-innovation yields
positive economic returns. In contrast, the high contributions of eco-
product innovation and eco-management innovation might be
explained by their positive association with firms' efficiency, product
quality, labour productivity (Naveh et al., 2006) and competitive
advantage (Mol & Birkinshaw, 2009). It is worth mentioning that, of all
aspects of firm performance, eco-product innovation always maintains
the highest positive contribution, while the promoting effect of eco-
technology innovation is always in the lowest position. These findings
are in line with previous studies proposing that eco-product innova-
tion positively impacts sales (Oh et al., 2020) and contradict findings
of previous studies arguing that eco-innovation—eco-product innova-
tion in particular—leads to low economic performance (Driessen
et al., 2013) and that firms engaging with eco-innovation will not
necessarily reap financial benefits (Aguilera-Caracuel & Ortiz-
10990836, 2022, 4, Downloaded from https://onlinelibrary.wiley.com/doi/10.1002/bse.2986 by Nat Prov Indonesia, Wiley Online Library on [02/10/2023]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License
ZHENG AND IATRIDIS
de-Mandojana, 2013), as eco-innovation leads to increased costs. We
show that eco-innovation leads to better economic performance, but
we also highlight areas that managers need to pay attention to.
6.2 | The influence of moderators
Our moderator analysis suggests that industry sector plays a role in
the relationship between eco-innovation and firm performance, with
manufacturing firms benefiting most in terms of their economic, envi-
ronmental and operational performance, while service firms benefit
most from eco-innovation in terms of social performance. At the same
time, we note that previous studies (e.g., De Marchi, 2012; Jové-
Llopis & Segarra-Blasco, 2020; Triguero et al., 2013) have not focused
on wholesale and retail trade sectors, which limits our understanding
of eco-innovation's potential to instil sustainability in all major indus-
try types. This is a significant shortcoming, as the wholesale and retail
sectors are responsible for major environmental impacts that need to
be addressed through eco-innovation.
We also focused on developed and developing regions and con-
firmed previous insights (e.g., Zhang, 2011), suggesting that both
developed and emerging economies encounter the same heavy bur-
den when confronted with the imbalance between economic growth
and environmental sustainability. In both instances, eco-innovation
emerges as a crucial tool enabling economies to flourish in a sustain-
able manner. However, our results illustrate that there might be dis-
crepancies regarding the influence of eco-innovation on different
regions. We contribute to the literature by suggesting that the higher
awareness of environmental issues more usually found in developed
than developing countries (Laroche et al., 2001; Ye et al., 2013) does
not necessarily translate into improved economic performance by
firms operating in developed countries. In contrast, we show that the
influence of eco-innovation on economic performance is more signifi-
cant in firms operating in developing than developed countries.
Equally, we argue that eco-innovation might have a greater impact
on social performance in developing than developed areas. In con-
trast, our results suggest that the impact of eco-innovation on envi-
ronmental and operational performance is higher in developed than
developing regions. These findings have significant implications for
managers of firms operating in both developed and developing
economies.
Furthermore, our findings support the view that eco-innovation is
more beneficial to SMEs than to large companies. The latter have
secured their position in the market and might not be willing to exper-
iment with new ideas. Unlike these big firms, SMEs perceive innova-
tion as a means of improving or sustaining their competitiveness
(Mathiyazhagan et al., 2014; Zhu & Sarkis, 2004) and are more inter-
ested in adopting sustainability-related innovation practices
(Hockerts & Wüstenhagen, 2010). Thus, our meta-analysis confirms
recent evidence suggesting that SMEs experience higher returns from
eco-innovation investments than large firms (Lin et al., 2019) and con-
tradicts insights suggesting that eco-innovations might be more popu-
lar with large companies (Horbach, 2016; Triguero et al., 2013).

ZHENG AND IATRIDIS
Finally, our meta-analysis pinpoints methodological discrepancies
among previous studies, as studies using surveys measure eco-
innovation and, mainly, economic performance using a single index,
such as the number of eco patents and return on assets (ROA)
(Przychodzen et al., 2019). In contrast, studies drawing on databases
often adopt a multidimensional scale and evaluate the relationship
between eco-innovation and firm performance more comprehensively
(e.g., Chang, 2018; Suganthi, 2019). These discrepancies in approach
account for the diversity of existing results and highlight the need for
more diverse approaches in researching eco-innovation and firm
performance.
6.3 | Limitations and future research directions
The use of meta-analytic procedures has its limitations, and this
study is not free of such limitations. First, our analysis did not take
into account qualitative studies but focused on quantitative research
only. Future studies could run meta-analytic approaches based on
both quantitative and qualitative data. Second, although we con-
ducted a meta-analysis that drew on a much larger sample than other
recent meta-analytic studies (e.g., Bitencourt et al., 2020; Hizarci-
Payne et al., 2021), we cannot claim that our approach is exhaustive.
We have made genuine efforts to cover as many keywords as possi-
ble. However, we do acknowledge that the terms used might not be
comprehensive, and we might, for that reason, have missed studies
published in the field which use keywords other than the ones we
used in our search criteria. Future studies could draw on our key-
word list and try to expand our approach. Third, our analysis included
the influence of moderators but did not consider the role of
mediators, which often provides a richer understanding (Boyd &
Solarino, 2016). The studies we reviewed examined direct, linear
effects leading from a given eco-innovation type to a specific out-
come. Future studies could examine the indirect effects of mediating
variables, such as supply chain management, knowledge management
and corporate image on the relationship between eco-innovation and
firm performance.
Despite its limitations, our study offers a detailed insight into the
types of eco-innovation that are likely to contribute positively to spe-
cific types of firm performance and those that firms need to be more
careful of. This insight, along with findings on the third factors that
are likely to influence the relationship between eco-innovation and
firm performance, are particularly useful for researchers investigating
this topic and for managers who want to use eco-innovation as a
means of improving their sustainability performance.
ORCID
Konstantinos Iatridis https://orcid.org/0000-0002-0425-699X
ENDNOTE
1
Search terms included eco innovation, environmental innovation, green
innovation, sustainable innovation, ecologically-sound innovation, eco-
logic innovation, eco-friendly innovation, eco innovative,
10990836, 2022, 4, Downloaded from https://onlinelibrary.wiley.com/doi/10.1002/bse.2986 by Nat Prov Indonesia, Wiley Online Library on [02/10/2023]. See the Terms and Conditions (https://onlinelibrary.wiley.com/terms-and-conditions) on Wiley Online Library for rules of use; OA articles are governed by the applicable Creative Commons License
1851
environmentally-responsible innovation, environmentally-sound innova-
tion, environmentally-safe innovation, environmentally-conscious inno-
vation, environmentally-friendly innovation, environment-friendly
innovation, energy-efficient innovation, energy-friendly innovation,
energy-saving innovation, organic innovation, carbon-neutral innovation,
renewable innovation, zero-waste innovation, low-carbon innovation,
fuel-efficient innovation, fuel-saving innovation, non-polluting innova-
tion, clean innovation, ozone-safe innovation, ozone-friendly innovation,
unpolluting innovation and eco-collar innovation.
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How to cite this article: Zheng, L., & Iatridis, K. (2022). Friends
or foes? A systematic literature review and meta-analysis of
the relationship between eco-innovation and firm
performance. Business Strategy and the Environment, 31(4),
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