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The purpose of this study is to explore the relationship between companies’ marketing innovation and environmental orientation and to determine how this relationship differs between manufacturing and service companies.

The study uses secondary data from the Technological Innovation Panel (PITEC) to look at 6,435 Spanish companies during the 2013-2015 period. To examine the contingency effect of the activity sector, the sample is divided into two subsamples: manufacturing companies and service companies. Partial least squares path modeling is used to test and validate the research model and proposed hypotheses.

The results show there is a statistically significant negative relationship between marketing innovation and environmental orientation. Significant differences were also found between manufacturing and service companies depending on the companies’ activity sector and size.

The analyzed manufacturing and service companies still use traditional marketing and have yet to embrace the “green marketing” or “marketing 3.0” concept. The marketing innovations a company undertakes should be positively, rather than negatively, related to its environmental orientation. In today’s companies, the two actions must go hand in hand.

Most studies on environmental orientation have focused on its relationship with technological innovation. In this sense, it is important to analyze its relationship with marketing innovation as well, as nowadays, when consumers are deciding between different companies’ products, they look for “companies with values.” Companies thus need to engage in environmentally oriented marketing innovation.

Open innovation is an issue that has aroused great interest in recent years. The need to create an environment that facilitates the creation of ideas is essential for the implementation of a series of changes in organizational practices and routines that lead to the launch of new products. However, due to the more behavioral nature and the lesser externalization of these changes introduced in the company's internal processes, how this process occurs has not been studied in depth. The objective of this study is to analyze the effect of an open innovation climate on both incremental and radical product innovation. Moreover, it specifically analyzes the mediating role played by hidden innovation in this relationship.

The methodology used in this study was based on a survey of 213 Spanish SMEs, subsequently applying the structural equation methodology to contrast the results.

The results indicate that open innovation climate offers significant competitive advantages to SMEs. First, the open innovation climate in SMEs favorably influences product innovation (both incremental and radical). Secondly, it is observed that hidden innovations are essential to obtain product innovations. Finally, evidence of the mediating effect of hidden innovation has been obtained.

Although the literature often focuses on visible innovation, materialized in product development, this study demonstrates the importance of other types of innovations that are necessary to launch new products. This is especially relevant for SMEs that, with limited resources, must be creative enough to involve their personnel in introducing changes that will lead to new products. This paper attempts to strengthen the previous literature on hidden innovation by contributing to the understanding of how SMEs improve their innovative processes. However, the study has the limitations derived from using a single informant to obtain data, using subjective-type scales and being a cross-sectional research.

Managers of SMEs involved in innovation processes should favor the creation of an open innovation climate and invest in organizational innovation. Governments should promote policies to support hidden and open innovation.

The main interest of this work is based on the importance of hidden innovation for the development of innovations. This study shows how organizations must make a series of organizational changes prior to the implementation of more visible innovations materialized in products. For this task, the creation of a favorable climate for the development of new ideas becomes a fundamental task. On the other hand, this study has focused on SMEs, which tend to have fewer means for the development of the right conditions for innovation and are often more neglected by scientific research.