Environmental networks and employment creation: Evidence from Italy

Abstract

The main object of this paper is to investigate the impact of environment-related networks (or eco-networks), which we interpret as a type of open eco-innovation, on employment. We exploit information from an original dataset which reveals collaboration among Italian enterprises that have signed business network agreements (BNAs), a policy instrument that was first introduced in 2009, and started in 2010, to strengthen the innovation and competitiveness of Italian firms. The results of the empirical analysis suggest that the intensity in the use of networks positively affects employment and that the marginal impact of increasing the intensity of BNAs in eco-networks on employment is larger than in other network. This is partly due to the fact that eco-networks rely more often on market strategies which are linked to product innovation. Finally, the sectoral heterogeneity of networks seems to be beneficial for employment creation, with a larger marginal effect for eco-networks than other networks. These results suggest that two important goals, environmental sustainability and employment creation, can be reconciled by means of flexible policy instruments that encourage open innovation and the sharing of knowledge and resources among firms.