Firms' eco-innovation and Industry 4.0 technologies in urban and rural areas

We investigate the extent to which firms' propensity to eco-innovate, adopt Industry 4.0 (I4.0) technologies and leverage them to eco-innovate varies with their location. We maintain that urban firms should be more prone to eco-innovate and adopt I4.0 technologies than rural ones, and more capable to make the latter functional to the former. Using a large sample of European firms, we test and confirm these hypotheses only partially. Firms in rural areas display a higher capacity to eco-innovate notwithstanding their lower digital propensity. However, an urban location reinforces the eco-innovative impact of digital technologies, irrespectively from its size.

Automated summary

The study investigates the impact of firms' location on their propensity to eco-innovate, adopt Industry 4.0 technologies, and leverage them for eco-innovation. The findings partially confirm that urban firms are more likely to eco-innovate and adopt I4.0 technologies, while rural firms exhibit a higher capacity for eco-innovation despite having lower digital propensity.