Internalization of Management Systems and Eco‐Product Innovation: The More the Better?

ABSTRACT Environmental challenges demand urgent and strategic responses from firms. Eco‐product innovation (EPI) is a key approach to reducing environmental impact while preserving competitiveness. This research analyses the relationship between EPI and the internalization of management system (MS) certifications, focusing on ISO 9001, ISO 14001, and ISO 45001, whether adopted individually or in combination. Using secondary panel data from 2769 firms in Europe and Asia from 2006‐2019, a panel logit analysis was conducted, supported by multiple robustness checks. The results reveal that only ISO 14001, individually and in combination, is positively related to EPI, while ISO 9001 and ISO 45001 show no direct effect unless combined with ISO 14001. Furthermore, certification duration shows an inverted U‐shaped relationship with EPI, highlighting the dynamic nature of EPI capability development linked to the internalization of MSs and the risk of erosion over time. Grounded in the dynamic resource‐based view, this paper emphasizes the dynamic nature of capabilities associated with the internalization of MSs and its consequences for EPI and as such has several implications for academia and practitioners.