Factors Influencing Automobile Firms' Eco-Innovation Orientation

:An eco-innovation is any innovation that reduces environmental damage. Even though eco-innovating is a key trend in industry today, relatively little research has been conducted on its implications for the automobile industry. In this article, the attitude toward the environment while innovating is analyzed using the SEM (Structural Equation Model) technique, applied to a data set of 223 Spanish automotive companies. Results of a statistical analysis with this data set show that companies which focus on processes and products when innovating tend to be more environmentally oriented and tend to highlight the importance of information sources more than those which do not have a focus on process and product innovation. Further, our results show that companies which see market information sources (coming from suppliers, clients, competitors, and external consultants) as important in the process of innovation and development of new products and markets are also more environmentally oriented. The consistency in our findings suggests that companies which look for more operational flexibility, increased production capacity, reduced labor costs per unit, or reduced energy consumption per unit when innovating are also more prepared to adopt an environmental orientation. These results have important managerial implications for firms that are trying to go greener as it highlights the variables that should be considered in their effort to be more environmentally oriented and the key elements to lead companies from innovation toward eco-innovation. Learning from this study will help managerial decision-making. The variety of variables analyzed allows practitioners to discover conclusions relevant to the engineering management field.