Experiential Knowledge and the Adoption of Sustainable Manufacturing Practices: A Multilevel Analysis Across European Economies

Abstract

The adoption of sustainable manufacturing practices (SMPs) is crucial to addressing global environmental challenges and ensuring long-term business viability. While previous studies have examined various drivers and barriers to the adoption of SMPs, the role of prior experience in shaping firms’ future decisions remains underexplored. This study examines whether firms’ previous experience with SMPs is associated with their planned adoption of additional sustainable practices and how this association varies across different macroeconomic conditions. Using data from the Flash Eurobarometer 498 survey covering 28 European countries, we applied multilevel mixed-effects ordered logistic regression to examine the association between firms’ planned adoption of additional sustainable practices, prior SMP experience, and country-level economic factors, including GDP per capita, environmental tax revenues, manufacturing value added, labor productivity, and energy efficiency. Our findings indicate a positive association between prior SMP experience and firms’ planned adoption of additional SMPs, consistent with the view that sustainability-oriented practices are shaped by cumulative organizational learning. However, macroeconomic conditions have mixed effects. Higher GDP per capita and higher levels of industrial productivity are negatively associated with firms’ planned adoption of additional SMPs, whereas environmental taxation is positively associated with planned SMP adoption among firms with prior SMP experience. The findings suggest that previous experience may help firms overcome barriers to the adoption of SMPs and indicate that policy design should account for differences between firms with and without prior experience in implementing SMPs. This study contributes to the literature on the knowledge economy and sustainability-oriented innovation in several ways. It highlights the role of cumulative learning processes in shaping firms’ sustainability strategies and contributes to the literature by integrating firm-level learning mechanisms with broader macroeconomic knowledge environments. While previous studies have primarily focused either on firm-level determinants or on policy-driven incentives, this research highlights the interplay between firm-level experiential knowledge and broader macroeconomic conditions in shaping firms’ planned adoption of additional SMPs.