Business Leadership in the Adoption of Eco-Innovation in Manufacturing: Evidence from Firm-Level Microdata

Živković, Lazar and Štrbac, Dijana (2025) Business Leadership in the Adoption of Eco-Innovation in Manufacturing: Evidence from Firm-Level Microdata. Business Ethics and Leadership, 9 (4). pp. 32-44. ISSN 2520-6311

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Abstract

With growing global concern about climate change, manufacturing, especially in emerging markets, faces increasing pressure to adopt sustainable practices. A key response is eco-innovation, involving cleaner technologies, greener production methods, and business models with reduced environmental impact. This research examines the role of business leadership in the adoption of eco-innovation in manufacturing. The analysis relies on microdata from the 2023 Community Innovation Survey conducted by the Statistical Office of Serbia, covering the period 2020–2022. Descriptive statistics and one-way ANOVA are employed to examine differences across sub-sectors, firm size, and technology intensity, as well as the influence of factors such as regulations, incentives, market demand, costs, and reputational considerations. The results show that business leadership plays a key role in driving eco-innovation, particularly when motivated by reputational benefits and cost pressures. In contrast, firm size and technological intensity have no significant effect, while differences across manufacturing sub-sectors are more pronounced. Firms are driven by energy and material costs, regulatory compliance, and reputational gains, whereas government incentives and green public procurement have limited influence due to weak and inconsistent policies. These findings highlight the strategic importance of leadership-driven decision-making in eco-innovation adoption, informing both business practice and policy design for the green transition in emerging economies.

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