Eco-innovation and environmental entrepreneurship: steps towards business growth

Eco-innovations are widely considered the best possible solution to fight the menace of environmental degradation. Therefore, in this analysis, we try to examine the impact of eco-innovations and environmental entrepreneurship on SME performance in China from 1998 to 2020. In order to get the short- and long-run estimates, we have employed the QARDL model that can estimate across various quantiles. The findings of the QARDL model confirm the positive impact of eco-innovations in increasing the number of SMEs in the long run, as the estimates attached to eco-innovations are positive and significant across most quantiles. Similarly, the estimates attached to financial development and institutional quality are positively significant across most quantiles. However, in the short run, the results are inconclusive for almost all variables. As far as the asymmetric impact of eco-innovations on SMEs is concerned, it is confirmed both in the short and long run. However, the asymmetric impacts of financial development and institutional quality on SMEs are only confirmed in the long run. Based on the results, important policy suggestions are discussed.