The Role of Innovation Financing in Enhancing the Environmental and Social Performance of Industrial Firms: A Panel Data Analysis

Abstract

Abstract

Innovation financing and its impact on the environmental and social performance of industrial companies have attracted growing interest in the current context of transition towards a sustainable economy. In this perspective, this study analyzes the relationship between different forms of innovation financing (R&D intensity and public subsidies) and the sustainable performance of industrial compagnies over the period 2015-2024. Adopting a retrospective quantitative research design, this study focuses on a sample of 40 industrial compagnies, divided equally between Morocco, Turkey, Tunisia, and Poland, 10 compagnies from each of these countries, and covering various industrial sectors. 

 The data are analysed using fixed-effects panel models in order to test three main hypotheses empirically, including the hypothesis concerning the moderating role of firm size. 

The results indicate that innovation financing has a positive and significant effect on environmental and social performance, and that this impact is stronger in large companies. Conversely, the effects on sustainable economic performance are more nuanced. The comparative analysis also reveals significant differences across countries, with polish compagnies showing higher sustainable performance, while Tunisian compagnies face greater challenges. The study concludes that supporting innovation financing constitutes a strategic lever to improve the sustainability of industrial companies and recommends strengthening public policies targeting responsible innovation to achieve the Sustainable Development Goals (SDGs).

Keywords: Innovation Financing, Environmental performance, Social performance, Industrial companies, Sustainable development.