What Drives the Turnover of SMEs in Europe Offering Green Products/Services?

This paper investigates the impact of green products/services and their drivers on the increase in the turnover of SMEs. The paper aims to fill the gap in the literature and create a clear picture for SMEs managers related to the impact of green products on SMEs turnover, as well as for policymakers related to the most impactful drivers for introducing green products by SMEs. The logit regression models were applied to a sample of 1,221 SMEs (for which green products/services represent more than 50% in annual turnover) in 36 European countries (EU + Western Balkans). The possible contribution of three groups of drivers (SMEs green technical expertise, SMEs own financial resources, and external support) was analyzed. The countries were divided into four clusters according to the current level of green economy development in the SME sector. The results show that all drivers will lead to an increase in turnover of green products/services brought to the market by SMEs in Europe only in countries with a moderately high level of green economy development. However, external support has insignificant impact on the turnover of SMEs offering green products in countries with an extremely high level of green economy development. Contrary, own financial resources are statistically insignificant for the increase in turnover of SMEs in countries with the lowest level of green economy development. Finally, the influence of own technical expertise is not statistically significant for the increase in turnover of SMEs only in countries with the lowest level of green economy development.