Green innovation and financial structures in firms. New insights from a survey of Italian SMEs

This chapter examines the impact of specific financial structure variables on green process and product innovation in Italian small and medium-sized enterprises (SMEs). It investigates whether debt and multi-banking relationships, which are widespread in Italy, facilitate or impede eco-innovation. The findings indicate that excessive leverage and/or overly complex banking networks impede innovation. This underlines the need to alleviate the financial constraints faced by Italian SMEs, particularly in the context of firm–bank relationships. In this respect, sustainable finance opens up two crucial issues. On the one hand, the potential of the emerging green equity market and on the other hand, the benefits of green banking practices that support the adoption of long-term sustainable strategies.