The value of incremental environmental sustainability innovation in the construction industry: an event study

Abstract

Investment in the innovation of environmental sustainability in construction has been encouraged due to the industry's resource-intensity. However, it remains unclear how to convince shareholders and construction companies to invest in environmental innovations.This research used the event study method with a sample of 129 announcements in the construction industry from 2011 to 2017 to investigate the relationship between incremental environmental sustainability innovation and the stock market reactions of construction firms.The research finds evidence that the stock market reaction has a strong positive relationship with these announcements. There is also evidence for a relationship between strategic alliance, capital turnover, and the project start date with the stock market reaction. The results provide insight into the benefits of incremental innovations in the construction industry and extend the literature of environmental sustainability innovation by considering contributing factors that affect the relationship between environmental sustainability innovation and firm performance. They provide a useful reference for shareholders to integrate environmental sustainability innovation into their business strategies and allocate their resources more efficiently.

The impact of the United Nations Sustainable Development Goals on corporate sustainability reporting

“…Natural resources play a key role in some firms’ strategic decisions (Hart, 1995) and in their centrality to several SDGs that challenge firms to make bold changes in their use of such finite resources (Bringezu & Bleischwitz, 2017; UN, 2015b; United Nations Environment Program, 2011). For example, Duong and colleagues’ (2021) recent analysis on the construction sector underscores the urgency of transforming high resource-intensive industries into more sustainable ones; a call that is shared by a number of other scholars (e.g., Kajander et al, 2012; Tan et al, 2015). Other recent studies have singled out firms in natural resource-intensive sectors for study, in part due to the scrutiny placed on major emitters of greenhouse gases (e.g., Cho et al, 2018; Talbot & Borial, 2018).…”

The relationship between green supply chain and green innovation based on the push of green strategic alliances

“…The emergence of strategic alliances is a consequence of global economic integration, manifested through voluntary cooperation agreements between two or more companies (Duong et al, 2021; Lin & Darnall, 2010). These agreements empower participating companies to attain objectives that an individual entity could not achieve solely due to its restricted capabilities (Ferreira, Coelho, & Moutinho, 2021; Kohtamäki et al, 2018).…”

Decision Tree and AHP Methods Application for Projects Assessment: A Case Study

“…Such an analysis could be applied as a part of methodology for developing the means for supporting the Green Deal objectives. The study of Duong et al (2021) [70] revealed that there is a positive stock market reaction to incremental sustainability innovation; however, there is a lack of studies that focus on the analysis of the investor behaviour in the context of changes in the market.…”