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

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.