The role of institutional pressures in the introduction of energy‐efficiency innovations

Relying on the institutional and innovation theories, we argue that the institutional features of countries are significantly influencing energy-efficiency innovation (EEI), a relevant and peculiar type of environmental innovation activities. An analysis of a cross-sectional sample of 22,936 firms from nine European countries, drawn from the 2006-2008 Community Innovation Survey, confirms the hypothesis that formal and informal institutions influence the propensity of firms to introduce EEIs in general. Furthermore, formal institutions that generate regulatory pressures are found to spur both product and process EEI activities, while informal institutions exerting social pressures emerge to be capable of significantly driving only product EEI activities. Large firms appear to be relatively more reactive to high regulatory pressures. We draw implications for policy makers and managers based on the findings.