Dear colleagues,
On behalf of Industry and Innovation, we would like to bring to your attention the seventh issue of the journal for 2024.
This issue includes a great selection of articles relating to our focus themes and linking innovation to corporate responsibility, the green transition and the digital transformation.
We hope you will enjoy the reading:
Which innovations for Circular Business Models? A product life-cycle categorisation
Elisa Chioatto, Emy Zecca & Alessio D'Amato
Abstract
Circular Economy has emerged to face current unsustainable economic trends. Clarifying and promoting tools for embedding circularity in firms' business models is becoming crucial. Notwithstanding Eco-Innovation has been recognised as a fundamental link to connect Circular Economy with business models restructuring, still little consensus exists on the interlinkages among the concepts of Eco-Innovation, Circular Economy and Circular Business Models. This research aims to understand which innovations can favour the transition from linear to closed-loop processes, and to identify circular business models using the lens of Eco-Innovation practices. We recognise three groups of innovations that are expected to drive firms' business towards circularity, leading to the identification of an original Product Life-Cycle Categorisation. An exploratory empirical analysis is finally developed on the basis of Italian Small and Medium Enterprises' data, in order to show the ability of our categorisation to distinguish across eco-innovative practices that are driven by (partly) heterogeneous determinants.
CSR spillover effects of corporate M&As by U.S. Acquirers
Grace Il-Joo Kang & He Soung Ahn
Abstract
This study explores CSR spillover effects within industries experiencing mergers and acquisitions (M&As), focusing on the response of non-target firms to M&As led by high-level CSR acquirers. We examine whether the involvement of socially responsible acquirers in M&As affects the CSR strategies of industry peers not directly engaged in these deals. Through an analysis of publicly listed U.S. firms from 1995 to 2018, we discover that non-target firms increase their CSR engagement following acquisitions by high-level CSR acquirers. Additionally, we observe that this spillover effect on CSR engagement is significantly amplified in industries characterised by high levels of competition. Our findings shed light on the extensive impact of M&As on CSR practices across industries, emphasising the importance of CSR spillover in influencing CSR activities industry wide.
Digital capability gaps in traditional industries: influencing factors and strategic responses
Erik Hanel & Martin Friesl
Abstract
This paper introduces the concept of digital capability gaps (DCG); the relative difference of a firm's ability to design and control products, services, and processes by utilising digital technologies in relation to customers and partners. These DCGs matter as they affect SME's strategic responses and the value-creating relationships. Our findings reveal that strategic responses differ according to the magnitude of DCGs: Large DCGs may offer the opportunity for 'digital diversification' by using the capabilities developed to enter new domains. In cases of moderate DCGs, firms respond by adopting the role of a 'digital parent' and innovate on behalf of customers. Finally, in the cases of small DCGs, firms may respond by forming 'digital collaborations.' Our study also unpacks the influencing factors that affect DCGs: the consolidation or fragmentation of customer portfolio and competitive landscape and the extent to which players have a similar digital pressure for adopting digital capabilities.
Mix and match: what is the best R&D recipe for eco-innovation?
Martina Ayoub & Stephane Lhuillery
Abstract
Eco-innovation is a complex activity that requires diverse knowledge and an extensive R&D and technology portfolio. This paper investigates the strategies employed by firms and the extent to which green and non-green R&D can influence eco-innovation. We address two research questions: Is investment in green R&D valuable and sufficient for successful eco-innovation? What types of investment are needed for eco-innovation? Our findings provide a better understanding of the mix of knowledge fields required for eco-innovation. To investigate internal firm R&D strategies we use unique data that allow us to identify the influence of the stocks of green and non-green R&D on eco-innovation and the importance of complementarity among specific R&D strategies and knowledge for eco-innovation. Our findings will be relevant for policymakers and firms, to promote investment in R&D to enable eco-innovation and ensure a quick transition to a green society.
Steering responsible innovation: the impact of EU REACH legislation on the novelty and toxicity of chemical inventions
Gianluca Biggi
Abstract
This study investigates the influence of EU Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) legislation on the technological trajectory of the chemical industry. Focusing on the Substances of Very High Concern (SVHC) list, this study used a novel dataset of chemical patents and structures filed at the European Patent Office (EPO) over the period from 1990 to 2016. A staggered difference-in-differences approach with inverse probability weights was used to measure the impact of the SVHC list on the novelty and toxicity of chemical patents. The analysis revealed a substantial increase in the chemical novelty of patents after the introduction of the SVHC list. Simultaneously, a significant decrease in the toxicity of these patents was observed, underpinning the legislative intent of REACH. These findings highlight the ability of regulatory frameworks to strategically steer innovation, reinforcing the alignment between technological advancement and the overarching goals of responsible and sustainable development.
Best regards
Alessandra Perri and Vera Rocha
Co-Editors-in-Chief, Industry and Innovation
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Vera Rocha
Copenhagen Business School
Kilevej
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