The Relationship between Eco-Innovation Performance and Firm Value: An Empirical Study

Abstract

This study examines the relationship between the level of innovation performance and the economic value of the company. The study proposes an analytical approach to reveal the benefits of innovation performance reports in all dimensions (product innovation, process innovation, organizational innovation, and marketing innovation) and their role in increasing the economic value of the company. The research analyzes the financial reports of 21 Iraqi industrial companies from 2011 to 2020 using content analysis, giving 194 observations (the year of the company). The research used innovation performance indicators according to the Macron (2017) scale consisting of 30 performance indicators to measure the performance of environmental innovation and the value of a company measured using the TobinQ index. The results show that the reporting levels of the innovation performance of the sample companies are lower than the total values of the measures used in the study. The data shows a statistically significant relationship between the level of environmental innovation performance in all four aspects of the innovation scorecard (product, process, organizational and marketing innovation) and the economic value of the firm. The results also show a statistically significant relationship between reporting all its dimensions and the economic value of the company. This study presents an integrated perspective of improving company value using innovation and sustainability performance indicators. It integrates the capabilities of Industry 4.0 with the Sustainable Development Goals to enhance corporate value. The findings of this paper help regulators and economic policy makers to develop sustainable development strategies at the national level and establish mechanisms that regulate the financial reporting process in corporate financial statements.