Investigating the effect of eco-efficiency actions on the performance of European small and medium enterprises

Abstract

The paper investigates the link between eco-efficiency actions and the turnover of SMEs within the EU28. In particular, we study how specific cases of eco-efficiency actions and the investment in these actions, as well as the available support to implement them, affect the SME turnover and production costs. For the analysis, we use the datasets from the Flash Eurobarometer surveys that are conducted in different time periods, namely: FL342, FL381, FL426 and FL456. The Porter hypothesis provides theoretical outlet while the ordered logit model is applied to test the relationship between the aforementioned variables and parameters. The results confirm that offering green services has a positive and significant relationship with firm growth in all four datasets. However, resource efficiency actions have mixed results. The increase in production cost in implementing eco-efficiency actions and investments does not go well with firm growth. However, these results vary considerably. The findings are crucial for stakeholders, policymakers and corporations to provide technical and legislative advice to SMEs for achieving competitiveness.