Environmental awareness and firm creation

PurposeThis study tests whether environmental awareness affects firm creation by using Google Trends data and a novel region-level data set from Italy.Design/methodology/approachForward-looking entrepreneurs drive firm creation. The authors hypothesize that more environmentally conscious entrepreneurs will emerge as environmental awareness rises, increasing the number of green and energy firms. The authors test the prediction using Google Trends data and a novel region-level data set from Italy.FindingsThe authors find that not only the number of green and energy-innovative firms but also that of all innovative start-ups increases with rising environmental consciousness. The results imply some "innovation spillover" effects from green sectors to other industries with rising environmental awareness.Originality/valueThe paper hypothesizes that as environmental awareness rises, more environmental-conscious entrepreneurs will emerge, which would increase the number of green and energy firms. Robustness and falsification tests are also offered.