Do Consumers Value Environmental Innovation in Product?

Cristina Aibar-Guzmán and Francisco M. Somohano-Rodríguez
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Cristina Aibar-Guzmán: Facultad de Ciencias Económicas y Empresariales, University of Santiago de Compostela, 15782 Santiago de Compostela, Spain
Francisco M. Somohano-Rodríguez: Facultad de Ciencias Económicas y Empresariales, University of Cantabria, 39005 Santander, Spain

Administrative Sciences, 2021, vol. 11, issue 1, 1-15

Abstract: Customers are considered to be major stakeholders whose demands and preferences have a strong influence on corporate strategies. In this sense, increased consumer environmental awareness has led to a growing demand for environmentally friendly products which, in turn, has compelled firms to adopt innovative forms of integrating environmental protection into product development and production processes. Nevertheless, an “attitude–behavior gap” has been witnessed, which implies that consumers’ environmental attitudes do not always translate into an actual ecologically compatible purchasing behavior and, consequently, eco-product innovations will not necessarily entail a positive economic impact for companies. This paper aims to analyze if the companies that invest in eco-product innovation are valued by consumers, showing higher growth. Specifically, we propose that eco-product innovation has a positive effect on a firm’s sales growth. Additionally, we aim to analyze the consumers’ preferences in relation to eco-product innovations considering two alternative approaches that companies can follow in this respect: eco-design and products with ecological use. The results obtained for an unbalanced sample of 5391 international companies corresponding to the period 2002–2017 (51,666 observations) show that proactive environmental innovation strategies are positively valued by consumers, having a positive impact on the companies’ sales growth. Furthermore, consumers show a greater preference for environmental innovations in eco-design than for products with ecological use.

Keywords: customer purchasing behavior; environmentally friendly products; eco-product innovation; eco-design (search for similar items in EconPapers)
JEL-codes: L M M0 M1 M10 M11 M12 M14 M15 M16 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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