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Environmental tax, SME financing constraint and innovation: Evidence from OECD countries

Environmental tax, SME financing constraint and innovation: Evidence from OECD countries
Environmental tax, SME financing constraint and innovation: Evidence from OECD countries

This article examines the impact of an environmental tax on small and medium enterprise (SME) innovation and how SME financing constraint moderates this relationship. Given the paucity of research on the implications of financing constraints on SMEs’ green innovative activities, the article adopts cross-country panel data to investigate the impact of environmental tax on SME's innovative activities across 24 OECD countries for the period 2000–2019. Results from our article indicate that an increase in environmental tax leads to a decrease in SME innovation. Furthermore, we also find that financing constraint positively moderates the relationship between environmental tax and SME innovation. Our findings shed new light on the theoretical and practical implications of financing constraints on SMEs’ green innovative activities.

Costs, Economic indicators, Economics, Environmental tax, Finance, Green products, Instruments, Technological innovation, governance, green innovation, small and medium enterprises (SME) financial constraints
0018-9391
Tingbani, Ishmael
e6b2741a-d792-4adf-84cc-a2f64d5545ca
Salia, Samuel
05cdade3-650f-4c27-a0e8-544c0af698d5
Hussain, Javid
aacf3c35-9920-44fb-8669-2c70c38d430c
Yahaya, Alhassan
d59eedbc-9953-47bd-8172-ea7055c15d07
Tingbani, Ishmael
e6b2741a-d792-4adf-84cc-a2f64d5545ca
Salia, Samuel
05cdade3-650f-4c27-a0e8-544c0af698d5
Hussain, Javid
aacf3c35-9920-44fb-8669-2c70c38d430c
Yahaya, Alhassan
d59eedbc-9953-47bd-8172-ea7055c15d07

Tingbani, Ishmael, Salia, Samuel, Hussain, Javid and Yahaya, Alhassan (2021) Environmental tax, SME financing constraint and innovation: Evidence from OECD countries. IEEE Transactions on Engineering Management. (doi:10.1109/TEM.2021.3110812).

Record type: Article

Abstract

This article examines the impact of an environmental tax on small and medium enterprise (SME) innovation and how SME financing constraint moderates this relationship. Given the paucity of research on the implications of financing constraints on SMEs’ green innovative activities, the article adopts cross-country panel data to investigate the impact of environmental tax on SME's innovative activities across 24 OECD countries for the period 2000–2019. Results from our article indicate that an increase in environmental tax leads to a decrease in SME innovation. Furthermore, we also find that financing constraint positively moderates the relationship between environmental tax and SME innovation. Our findings shed new light on the theoretical and practical implications of financing constraints on SMEs’ green innovative activities.

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Accepted/In Press date: 16 September 2021
e-pub ahead of print date: 18 October 2021
Additional Information: Publisher Copyright: IEEE
Keywords: Costs, Economic indicators, Economics, Environmental tax, Finance, Green products, Instruments, Technological innovation, governance, green innovation, small and medium enterprises (SME) financial constraints

Identifiers

Local EPrints ID: 451385
URI: http://eprints.soton.ac.uk/id/eprint/451385
ISSN: 0018-9391
PURE UUID: 81ac61d7-9796-4a13-8075-9154ac4c959d
ORCID for Ishmael Tingbani: ORCID iD orcid.org/0000-0002-4012-1224

Catalogue record

Date deposited: 23 Sep 2021 16:30
Last modified: 17 Mar 2024 06:50

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Contributors

Author: Samuel Salia
Author: Javid Hussain
Author: Alhassan Yahaya

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