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1 – 10 of over 7000Ning Liu, Linyu Zhou, LiPing Xu and Shuwei Xiang
As the cost of completing a transaction, the green merger and acquisition (M&A) premium paid on mergers can influence whether the acquisition creates value or not. However…
Abstract
Purpose
As the cost of completing a transaction, the green merger and acquisition (M&A) premium paid on mergers can influence whether the acquisition creates value or not. However, studies linking M&A premiums to firm value have had mixed results, even fewer studies have examined the effect of green M&A premiums on bidders’ firm value. The purpose of this paper is to investigate whether and how green M&A premiums affect firm value in the context of China’s heavy polluters.
Design/methodology/approach
Using 323 deals between 2008 and 2019 among China’s heavy polluters, this paper estimates with correlation analysis and multiple regression analysis.
Findings
Green M&A premiums are negatively associated with firm value. The results are more significant when firms adopt symbolic rather than substantive corporate social responsibility (CSR) strategies. Robustness and endogeneity tests corroborate the findings. The negative relation is stronger when acquiring firms have low governmental subsidy and environmental regulation, when firms have overconfident management, when firms are state-owned and when green M&A occurs locally or among provinces in the same region. This study also analyzes agency cost as an intermediary in the relationship between green M&A premium and firm value, which lends support to the agency-view hypothesis.
Originality/value
This study provides systemic evidence that green M&A premiums damage firm value through agency cost channel and the choice of CSR strategies from the perspective of acquirers. These findings enrich the literature on both the economic consequences of green M&A premiums and the determinants of firm value and provide a plausible explanation for mixed findings on the relationship between green M&A premiums and firm value.
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Cecilia Souto Maior, Danielle Mantovani, Diego Costa Pinto and Mário Boto Ferreira
Earlier research indicates that brand choices may display different identity signals, such as altruism and benevolence for green brands or high status and exclusiveness for premium…
Abstract
Purpose
Earlier research indicates that brand choices may display different identity signals, such as altruism and benevolence for green brands or high status and exclusiveness for premium brands. This research adds to the literature by exploring how opting for green (vs premium) brands leads consumers to feel authentic (vs hubristic) pride.
Design/methodology/approach
Three experimental studies were conducted to test the hypotheses related to green versus premium choices (Studies 1–3), public accountability (Study 2) and the underlying process of anticipated judgment (Study 3).
Findings
The findings reveal that choosing a green (vs premium) brand results in higher authentic pride and lower hubristic pride. However, the green pride effects were only observed when consumers' brand choices were publicly accountable. Finally, anticipated judgment mediates changes in authentic pride driven by green (vs premium) brands.
Originality/value
The study findings contribute preponderantly to the green consumer behavior literature and practice by providing primary evidence that green (vs premium) branding can trigger distinct patterns of pride in comparative decisions.
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Graeme Newell, John MacFarlane and Roger Walker
Green office buildings have recently taken on increased significance in institutional property portfolios in Australia and globally. The key issue from an institutional investor…
Abstract
Purpose
Green office buildings have recently taken on increased significance in institutional property portfolios in Australia and globally. The key issue from an institutional investor perspective is the assessment of whether green office buildings add value. Using an extensive portfolio of green office buildings, the purpose of this paper is to empirically assess the level of energy rating premiums in the property performance of green office buildings in Australia.
Design/methodology/approach
Using a portfolio of over 200 green office buildings in Australia benchmarked against a comparable portfolio of non-green office buildings, the level of energy rating premiums in the property performance of green office buildings in Australia is empirically evaluated. Hedonic regression analysis is used to account for differences between specific office buildings and to explicitly identify the “pure” green effect in identifying the level of energy rating premiums in several commercial property performance characteristics (e.g. office value, rent).
Findings
The empirical results show the added-value premium of the 5-star National Australian Built Environment Rating Scheme (NABERS) energy rating scheme and the Green Star scheme in the property performance of green office buildings in Australia, including office values and rents. Energy rating premiums for green office buildings are evident at the top energy ratings and energy rating discounts at the lower energy ratings. The added-value “top-end” premium of the 5-star vs 4-star NABERS energy rating category is clearly identified for the various property performance parameters, including office values and rents.
Practical implications
This paper empirically determines the presence of energy rating premiums at the top energy ratings in the performance of green office buildings, as well as energy rating discounts at the lower energy ratings. This clearly highlights the added value dimension of energy efficiency in green office buildings and the need for the major office property investors to prioritise the highest energy rating to facilitate additional property performance premiums. This will also see green office buildings become the norm as the market benchmark rather than non-green office buildings.
Social implications
This paper highlights energy performance premiums for green office buildings. This fits into the context of sustainability in the property industry and the broader aspects of corporate social responsibility in the property industry.
Originality/value
This paper is the first published property research analysis on the detailed determination of energy rating premiums across the energy rating spectrum for green office buildings in Australia. Given the increased focus on energy efficiency and green office buildings, this research enables empirically validated and practical property investment decisions by office property investors regarding the importance of energy efficiency and green office buildings, and the priority to achieve the highest energy rating to maximise property performance premiums in office values and rents.
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Erica Mina Okada and Eric L. Mais
Many market examples show that consumers are willing to pay a premium for “green” products and services. The purpose of this paper is to gain some insight into how consumers…
Abstract
Purpose
Many market examples show that consumers are willing to pay a premium for “green” products and services. The purpose of this paper is to gain some insight into how consumers respond to green alternatives, and examine how managers can best position their green products to maximize the premium consumers are willing to pay.
Design/methodology/approach
A series of behavioral experiments was conducted to demonstrate how the green product's characteristics are framed significantly affects the size of the “green premium” consumers are willing to pay.
Findings
The results show that positive framing (focusing on the advantages of the green product) works best for environmentally conscious consumers while negative framing (focusing on avoiding the disadvantages of the non‐green product) works best for less environmentally conscious consumers. Additionally, subtractive price framing which focuses on the discount consumers would pay for the non‐green product alternative results in a higher green premium than additive price framing which focuses on the additional price consumers would pay for the green choice, and especially so for less environmentally conscious consumers.
Research limitations/implications
Overall, the results suggest that green firms can maximize the green‐pricing premium by careful targeting of consumers and framing their products appropriately.
Originality/value
This paper explores how the difference between the green versus non‐green alternative can be framed in different ways, and interact with the consumer's level of environmental consciousness, to influence the “green premium,”, i.e. how much more consumers are willing to pay for the green alternative relative to a comparable non‐green alternative.
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Vinay Ramani, Sanjeev Swami and Debabrata Ghosh
The purpose of this paper is to study the impact of collaboration between supply chain entities in a dyadic setting where the manufacturer invests in greening and technology…
Abstract
Purpose
The purpose of this paper is to study the impact of collaboration between supply chain entities in a dyadic setting where the manufacturer invests in greening and technology adoption effort leading to a price premium effect for the supply chain players.
Design/methodology/approach
The paper uses game theoretic approach to analyze the model of inter-firm interaction in a vertical channel setting consisting of a retailer and manufacturer. The paper studies strategic decisions of the channel members in a decentralized and centralized structure and extends this to decision making under contractual settings.
Findings
A two-part tariff completely coordinates the green supply chain, while a cost sharing and revenue sharing contract only achieve partial coordination. Nevertheless, a cost sharing, as well as a revenue sharing contract, increases the greening and technological adoption effort by the manufacturer while yielding the supply chain members a strictly larger profit. Furthermore, a revenue sharing contract in comparison to a cost sharing contract, leads to a larger greening and technological adoption effort by the manufacturer, lower wholesale and retail prices and a strictly larger profit for both the manufacturer and the retailer.
Originality/value
This paper contributes to the green supply chain pricing, technology and contract literature considering strategic interactions between a manufacturer and retailer in a supply chain under price premium effects of greening activities and technological advancements.
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Giacomo Morri and Federico Soffietti
Real estate sustainability can be best demonstrated through a “green” certification such as leadership in energy and environmental design, but, in markets where little precedent…
Abstract
Purpose
Real estate sustainability can be best demonstrated through a “green” certification such as leadership in energy and environmental design, but, in markets where little precedent is available, quantification of costs and premiums related to green buildings is still ridden with uncertainty. The aim of this study is to shed some light on market rent and price premiums as perceived by professional operators in Italy.
Design/methodology/approach
A survey of two cohorts of real estate stakeholders, either members of the Green Building Council Italia or commercial real estate investors, was carried out by means of an online questionnaire.
Findings
Based on 270 responses, it can be inferred that, while the importance of green building is widely acknowledged, caution is still prevalent regarding expected gains. In fact, the majority of respondents perceive the increase in rent and price premiums as being equivalent to additional costs.
Originality/value
This is the first attempt to analyze perceived importance of greenbuilding in Italy.
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Manman Wang, Menghan Chen and Feng Yang
This paper investigates how a regulator pursuing social welfare maximization designs an optimal subsidy scheme to stimulate technology innovation in the presence of a consumer…
Abstract
Purpose
This paper investigates how a regulator pursuing social welfare maximization designs an optimal subsidy scheme to stimulate technology innovation in the presence of a consumer green premium. Specifically, the authors solve the following questions: (1) Does the consumers' green premium affect the design of the subsidy scheme? (2) How should the firm choose a green technology innovation strategy under the optimal subsidy scheme? (3) Does technology innovation bring higher social welfare and lower environmental impact?
Design/methodology/approach
The authors first develop a game model to explore the impact of subsidy schemes on social welfare without considering technology innovation. Then the authors investigate two innovation strategies, in-house innovation and external introduction, under the optimal subsidy scheme. Finally, they illustrate the optimal choices of innovation strategy for the firm, consumers and regulators.
Findings
The results reveal that the subsidy scheme will not always increase social welfare, which depends on the environmental improvement coefficient of the unit green level. The optimal subsidy level increases with the green premium, but it is not related to the size of the consumer green segment. Moreover, the success rate of in-house innovation will raise the optimal green level, but the company benefits from an increased success rate of in-house innovation only when the green segment is large enough. The green segment size and external green level jointly determine the choice of technology innovation strategy.
Originality/value
This research is the first to analyze this problem while considering the green demand and subsidy scheme simultaneously as drivers of a firm's technology innovation, thereby providing new managerial implications for decisions by the regulator and firms.
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Rila Anggraeni and Christin Susilowati
Many companies produce environmentally friendly goods and offer their products with varied attractive marketing mix strategies. One of the company's potential target markets is…
Abstract
Many companies produce environmentally friendly goods and offer their products with varied attractive marketing mix strategies. One of the company's potential target markets is millennials because the growing number of this community has become enormous. In terms of behavior, millennials have a high level of consumption compared to other generations. However, there are big questions about the willingness of millennials to consume green products. This study aims to acknowledge the green product buying behavior among millennials, especially premium green products. The variables expected to influence the millennial's willingness to pay premium include environmental concern, reference group, and pro-environmental attitude. Data collected through a survey of 250 respondents. The hypothesis framework was tested using PLS-SEM modeling to evaluate the measurement and structural models with the assistance of Warp PLS version 7.0. This study found that millennials who consider the importance of preserving the environment and have a reference group that solicitude to the environment will have a pro-environmental attitude and willing to buy the green product, even though it has a higher price. Green product's management can use the result to formulate an effective green marketing strategy to target the millennials. Regarding the need for millennials' environmental behavior clearer picture in a developing economy, the present study inflicts the literature by describing the antecedents of millennials' willingness to pay premium green products. The results also give practical implications by shedding light on millennials’ green behavior variables. It helps green entrepreneurs conceive their strategic marketing management, and thus can boost the green economy and economic growth.
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The purpose of this paper is to determine if there is an impact of sustainability on the market in terms of a green premium or a brown discount on the price of commercial and…
Abstract
Purpose
The purpose of this paper is to determine if there is an impact of sustainability on the market in terms of a green premium or a brown discount on the price of commercial and residential real estate. It also seeks to identify the incentives and barriers for sustainable developments perceived by real estate professionals.
Design/methodology/approach
The paper investigates the impact of sustainability features on the valuation of buildings in the United Arab Emirates (UAE). The study uses a qualitative structured questionnaire to determine the views of certified real estate valuers and advisors on this subject.
Findings
The results suggest a green premium of at least 1% in the UAE, coming from both supply-side and demand-side, and in commercial and residential sectors. Key barriers for the recognition of green building value include availability of reliable market data, lack of relevant technical skills and apparent client disinterest. Initiatives that would encourage green buildings include financial incentives for key stakeholders, raising and enforcing building standards, and higher energy prices. This paper identifies policy measures that local authorities may consider in transforming to a more sustainable economy. It is expected that such changes would convey to the real estate industry and affiliated stakeholders the financial benefits to be gained from investing in green buildings.
Research limitations/implications
The UAE is not a transparent environment in terms of building prices and rents, and it can be challenging even for experienced professionals to determine whether an observed higher value can truly be considered a green premium. The second issue is that the results may be affected by a “voluntary response bias”, whereby recipients who are interested in sustainability are more likely to have responded to the survey.
Practical implications
This paper identifies policy measures that local authorities may consider in transforming to a more sustainable economy. It is expected that such changes would convey to the real estate industry and affiliated stakeholders the financial benefits to be gained from investing in green buildings.
Originality/value
Most research exploring the value of green buildings originates from developed economies and its applicability to the Middle East is questionable due to its differing origins and unusual development path. This article offers new insights into an under-researched market.
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This study aims to examine how green branding strategies affect pay-premium behaviour of consumers for high- vs low-involvement green products in an emerging country.
Abstract
Purpose
This study aims to examine how green branding strategies affect pay-premium behaviour of consumers for high- vs low-involvement green products in an emerging country.
Design/methodology/approach
Data were collected from 500 consumers by survey method, and structural equation modelling was run to analyse the hypotheses.
Findings
Consequently, it was found that for involvement level consumers’ pay-premium behaviour was affected indirectly by perceived quality, and directly by green brand equity and brand credibility. Moreover, in addition to those factors, for low-involvement green products, performance risk and financial risk have an impact on willingness to pay more; however, for high-involvement green products, only performance risk influences the pay more behaviour of consumers.
Research limitations/implications
In the research, two involvement levels and two brands were used. Brand names in particular may have caused a bias in the measurement. And the findings are limited by the sample, which includes respondents from an emerging country.
Practical implications
Managers should focus on green brand equity, brand quality and credibility to support willingness to pay more for green products. Moreover, they should monitor performance risk and financial risk perceptions, which may differ according to the involvement levels.
Originality/value
There is no other study, at least to the best of the author’s knowledge, testing the effects of brand-related factors on consumers’ willingness to pay-premium for green brands.
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