Good Innovation Capacity, Good Eco-Innovation Performance? From Firms Innovation, Learning Capacity, and Institutional Environment

Owing to the growing complexity of environmental consequences of manufacturing firms' traditional internal operations, there is an urgent call for firms’ eco-innovation performance. However, manufacturing firms lack a full understanding of what effective strategies and mechanisms could deliver eco-innovative solutions optimally. Through the organizational and institutional theories, we develop a conceptual model on the effect of innovation capacity, firms learning capacities, regulatory quality, and rule of law on eco-innovation performance. We adopted the cross-sectional survey design to sample data from 479 respondents of 15 manufacturing firms in Porto-Norvo, Cotonou, and Bohicon cities of Benin. The results indicate that firms’ innovation and learning capacities have a positive impact on eco-innovation. We also found that regulatory quality and rule of law had no positive significant moderating effect on the relationship between firms’ learning capacity and eco-innovation. However, rule of law was negative but significantly moderated the relationship. Our study emphasizes the effect of innovation capacity on firms’ learning capacity and how firms’ learning capacity influences eco-innovation. We also emphasize how rule of law indirectly contribute to eco-innovation performance. This theoretical and empirical analysis has received little attention in the eco-innovation literature.