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Firms, Finance and Sustainable Transitions

The Financial Constraints of Eco-Innovation Companies

Edgardo Sica

This thought-provoking book introduces a financial economics perspective to the topic of eco-innovations and, more generally, sociotechnical transitions. It develops a model that illustrates how financial constraints can prevent the development of eco-innovations within companies and hinder the transition process towards a more sustainable regime. Edgardo Sica presents a review of the state of the art, as well as new data from original surveys aimed at testing the impact of financial constraints on eco-innovative decisions at radical and niche levels.
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Index

The Financial Constraints of Eco-Innovation Companies

Edgardo Sica

additive technologies 5, 79
adjacency matrices 130
agency theory 42, 44, 55, 59, 64
anaerobic digestion 11920
asymmetric information 42, 44, 456, 4950, 52, 54, 55, 60, 81, 108, 128, 154
barriers to eco-innovations 1819, 28, 32, 48, 78, 82, 1048, 126, 135
biogas 11920
borrowers 44, 51, 54, 57, 60
monitoring 545, 60
bounded rationality 13
business angels 40, 89, 104, 126
capital structure 4042
cash-flow 47
CAWI technique 7, 108, 110, 133
climate change 33, 41, 77
Community Innovation Survey 48
companies’ ownership 42, 45, 47, 57, 64, 87, 90
competitive markets 32, 61
complexity
in the socio-technical transitions 7071, 75
of the financial system 634, 81
coordinated market economies 612, 64, 90
corporate governance 579, 612, 64, 81, 87
cost-saving innovations 356, 73, 75, 77, 79, 103, 124
credit 3940, 42, 44, 48, 60, 89
curative technologies 5, 78, 11, 79
debts 425
destabilisation pressures 14, 725, 77
digestate 11920
dominant design 80
dominant regime 84, 155
double externality problem 1112, 13, 18, 78
drivers of eco-innovations 25, 28, 33, 39, 735, 82, 101, 123, 125
eco-design 1920
eco-efficiency 6, 1920, 33, 35, 41
eco-industries 4
eco-inventions 92
eco-leases 8
ecological modernisation 1011
eco-management systems 7
effluents 40
emerging technologies 18, 62, 73
end-of-pipe technologies 57, 11, 28
energy-savings technologies 8, 1920
England 8790, 98104
environmental audit 7, 32
environmental damages 2, 4, 5, 78, 10, 79
environmental databases 923
environmental disclosures 50
environmental motivation of innovators 35, 17, 73, 154
environmental performance of innovations 35, 14, 17, 278, 314, 41, 51, 735, 154
environmental policy
cycle see Krozer’s model
effectiveness 18, 29, 78, 154
enforcement 31
instruments 278
stringency 2932, 78
environmental preservation 1, 4, 13, 17, 33, 101
environmental protection expenditures 9091
environmental regulation see environmental policy
environmental reputation 4951, 78, 1078, 1268, 156
environmentalism 29
equilibrium 13, 17
equity 429, 57, 89, 104, 1256
evolutionism 1314, 1718
expectations
in investments 49, 467
of niche actors 80, 84, 129, 130, 1345, 14042, 155
externalities 1112, 26, 154
financial architecture 556, 878, 90, 95, 104
financial constraints
definition 44
determinants 513
multi-level perspective and 812
past empirical evidence 469
financial intermediaries 4042, 534, 5960, 64, 89, 108
financial markets 4043, 537, 59, 64, 108
financial system
bank-based 546, 63
bank-centred 56, 878, 104
in Italy 56, 8791
in the UK 567, 63, 8791
market-based 546, 634, 878
fossil-based regime see unsustainable regime
funding options 4042
funds shortage 44, 53, 81
green capabilities 31, 35
green finance 4042, 154
green investments 4041
green stocks 51
greenhouse gases 1, 4, 8
greening of innovation systems 1517
hierarchy of finance 42, 469
household savings 55
incremental innovations 89, 13, 28, 35, 62, 726, 79, 82, 8990, 125
incumbent technologies 18, 27, 78
insider-dominated systems 57, 59
institutional actors 121, 14041, 155
institutional innovations 8, 77
integrated technologies 56, 28
inventions 8, 924
investment decisions 4251
Italy 8790, 98104
Krozer’s model 2932, 7980
Kuznets curve 910
learning of niche actors 71, 80, 129, 134
legal framework
civil law 623, 64, 88, 90
common law 624, 88, 90
lemons market 426
lenders 44, 54, 57, 60
liabilities 40, 50, 534
liberal market economies 612, 64, 90
lock-in failures 15
manufacturing sector 9091, 97108
market failures 1112, 15, 1719, 26, 78
market imperfections 42
marketing innovations 5, 100
maturation period 31, 79
Modigliani-Miller theorem 424
monopolistic markets 32
moral hazard 5960
multi-level perspective 7072
macro-level see socio-technical landscape
meso-level see socio-technical regime
micro-level see technological niche
national system of innovations 53
neoclassicism 9, 1113, 1718, 256
networking 130, 1412, 155
niche readiness 84, 130, 1345, 141, 154
non-excludable goods 26
non-rival goods 26
non-technological eco-innovations 5, 78, 17, 92
organisational innovations 5, 7, 1819, 735, 79, 82, 84, 9094, 100, 125, 154
outsider-dominated systems 57, 59
paradigmatic shift 75
patents 78, 923
path dependence 27, 78
policy design 12, 18, 29, 35
policymakers 25, 27, 31, 71, 77, 81, 129
pollutant emissions 910, 26, 33
Porter hypothesis 12
precautionary principle 10
preventive technologies 5, 78, 11
principal-agent problem 45
proactive companies 84
product design 6, 1920, 28, 33, 77, 80
profitable investments 42, 445
profits 12, 31, 41, 73, 81, 84
public intervention 15, 18, 257, 53
quasi-public goods 38
questionnaire
administration 947, 121
consistency 967
design 93
validation 967, 121
radical innovations 89, 14, 345, 40, 62, 726, 7980, 82, 119, 125, 1289
recyclability 4, 6, 8, 33, 40, 89
renewable energy 120
sampling strategy 95, 98
Schumpeterian theory 1, 8, 32, 39
sectoral system of innovations 52
shareholders 446, 57, 62, 64, 87, 90, 109
shocks 71, 75, 77
signalling
in asymmetric information 457, 52, 54
in environmental policy 29, 31, 7980
and environmental reputation 4951
social innovations 78, 77
social network analysis 1289
with attributes 130, 1345, 140, 157
sociograms 130, 135, 140
socio-technical landscape 14, 18, 712, 757, 82
socio-technical regime 1314, 18, 712, 745, 769, 82
and sub-regime 77, 81, 83
socio-technical transitions 1314, 18, 7072
stakeholders 3, 19, 34, 4950, 57, 60, 62, 789, 81, 157
strategic niche management 128
super-industrialisation 10
sustainability transitions 7384
system failures 15, 18, 27, 78
system’s co-evolution 8, 1315, 18, 72, 77, 81
taxes 11, 28, 445, 53
techno-economic paradigm 2, 15
technological eco-innovations 57, 911, 1415, 1718, 735, 7882, 84, 90, 92, 101, 1256, 1289
technological niche 14, 18, 712, 74, 7980, 82
technological trajectories 14, 15, 72, 77, 81
transition failures 15
uncertainty
about regulation 29
about the eco-innovation process 29, 312, 73
in the financial markets 53
unsustainable regime 70, 78, 141, 155
varieties of capitalism 61
venture capital 40, 81, 89, 104, 126
win-win solution see Porter hypothesis