Technological innovation and eco-efficiency in manufacturing companies: Does Co-innovation orientation matter?

The rising need for sustainable development poses a critical challenge for manufacturing companies, requiring a fresh perspective on adopting greener practices. One recent approach to enhancing sustainability in manufacturing is the development of innovations in the pursuit of achieving higher eco-efficiency. This study delves into this approach by investigating the effect of technological innovation on eco-efficiency. In addition, this research examines the role of co-innovation orientation in relation to suppliers and customers. In the empirical exercise, an ordered probit model is applied to a sample of 791 manufacturing companies from Peru. Our research reveals a positive association between the distinct types of technological innovation and eco-efficiency, with process innovation yielding the most substantial effect. In terms of co-innovation orientation, we find co-innovation with suppliers to be more effective in driving eco-efficiency through product and process innovations, while co-innovation with customers seems more influential through product-service innovation. We also found that, for companies co-innovating with suppliers (CIS), complementary co-innovation with customers does not influence eco-efficiency. Conversely, for those co-innovating with customers (CIC), the fact that they also co-innovate with suppliers significantly boosts eco-efficiency.