Does eco‐innovation drive sales and technology investment? Focusing on eco‐label in Korea

Abstract

As environmental problems worsen, eco-innovation research has received increased attention. Korea is implementing an eco-label policy to induce eco-innovation. Eco-labeling is a type of voluntary eco-innovation. There are few empirical studies on the economic performance of eco-labels in Korea and even fewer on the additional investment in the technology used for eco-labeling. The present study quantitatively measured the effect of eco-labels on additionally generated sales and research and development (R&D) investment through propensity score matching. The results revealed that eco-labeling has a positive impact on sales over the following 2 years, which is the expiration date of certification; moreover, investment in R&D typically increased for 3 years before certification. Interestingly, no additional R&D investment was made after certification. This study is mainly a basis for the introduction of environmental certification to government policymakers or product strategists who have yet to implement a certification system.

Is It Necessary to Centralize Power in the CEO to Ensure Environmental Innovation?

“…Eco-innovations not only entail environmental benefits, but also are a source of competitiveness for firms (Porter and Linde 1995;Demirel and Kesidou 2011;García-Sánchez et al 2020a). Indeed, several studies have showed that successful environmental innovations allow companies to diminish costs and risks (Hart and Ahuja 1996;Ambec and Lanoie 2008), increase sales and market share both in current markets and in new markets (Kim et al 2019;Oh et al 2020), improve stakeholder relationships and firm reputation (Brammer and Pavelin 2006;Cheng and Shiu 2012), and enhance productivity and margins (Sammer and Wüstenhagen 2006;Ruben et al 2009;Ruben and Fort 2012), among other competitive benefits. To the extent that the overall benefits exceed the costs and risks involved, eco-innovations will have a positive impact on financial performance (Long et al 2017).…”

“…The study of the effect of eco-innovation on financial performance has received considerable attention in the literature, although empirical results are not conclusive existing two opposite trends (Przychodzen and Przychodzen 2015;Alos-Simo et al 2020;Oh et al 2020). The majority of empirical evidence documents a positive association between eco-innovation and financial performance (Hojnik et al 2018).…”

“…These studies have stressed the potential economic benefits for companies associated with eco-innovation. For example, some authors showed that customers prefer eco-labeled products (Martinez-del-Rio et al 2015) and are more willing to pay for them (Sammer and Wüstenhagen 2006), so that eco-labeling results in an increase of market share and sales (Oh et al 2020). Cost savings (Ambec and Lanoie 2008;Kanda et al 2018) as well as the reduction in the risks and costs of penalties and litigation derived from eco-innovation (Hart and Ahuja 1996) also contribute to enhance firm profitability (Ma et al 2018).…”

Does Environmental Policy Promote Energy Efficiency? Evidence From China in the Context of Developing Green Finance

“…The promotion effect of green finance on ecological innovation has been extensively confirmed, including on green technology innovation (Chassagnon and Haned, 2015) and green patents (Marin-Vinuesa et al, 2020), the R and D investment (Costa-Campi et al, 2017;Oh et al, 2020), as well as financial performance (Duque-Grisales et al, 2020;Xiang et al, 2020). Jones (2015) pointed out that sustainable finance and green finance encouraged investment in new technologies and innovations, which include renewable energy technologies.…”

Do Consumers Value Environmental Innovation in Product?

“…Secondly, we add to the understanding of the economic impact of environmental innovations by showing the effect of eco-product innovations on sales growth. Although the contribution of environmental innovations to business performance has been extensively analyzed (Przychodzen and Przychodzen 2015;Oh et al 2020), prior research obtained no conclusive results (Hojnik et al 2018). A possible explanation could be the use of different proxies of firm performance (e.g., ROI, profitability, operating profit).…”