Eco-efficiency actions and firm growth in Portugal

Abstract

This study investigates the effect of eco-efficiency actions on firm performance, considering the turnover growth, on a sample of 7083 enterprises located in Portugal. Empirical results suggest that in general, for all the sectors involved, the undertaking of an eco-strategy aimed at being more resource efficient is related with increased growth in turnover. They also seem to show that there exists an inverted U-shaped relationship between the number of eco-innovation strategies implemented and turnover growth, allowing us to conclude that while in an initial stage an increase on the number of eco-innovations implemented by a firm increases turnover growth, in a second stage it will lead to decreased turnover growth. This may induce the existence of an optimal value for eco-innovation-strategies implemented within the firm. The substitution of fossil fuels by renewable sources also seems to be an important strategy that benefits turnover growth, as well as the environmental benefit of recycled waste, water or materials for own use or sale.