STATEMENT OF ORIGINALITY
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ABSTRACT
This research investigates to what extent differences in eco-innovation of apparel companies affect consumers’ perception about the companies’ motivation to engage in sustainable innovation. The underlying assumption is that consumers are able to perceive different types of innovation by observing the organisational characteristics of two specific types of companies: large incumbent and small entrepreneurial companies. It was expected that consumers would assign extrinsic motivations to incumbent companies engaging in incremental eco-innovation and intrinsic motivations to entrepreneurial companies engaging in radical eco-innovation. This empirical study found that only consumers with high levels of knowledge about environmental issues were able to assign extrinsic motivations to companies’ incremental eco-innovation. Since this research presented hypothetical situations to consumers in which only one type of eco-innovation was presented, it would be valuable for future research to present consumers with both incremental and radical innovation to see if this would lead to new interesting findings.
Table of Contents
1. INTRODUCTION ... 4 2. LITERATURE REVIEW ... 8 2.1 SUSTAINABLE TRANSFORMATION OF THE APPAREL INDUSTRY ... 9 2.1.1 CORPORATE INCREMENTAL ECO-INNOVATION ... 10 2.1.2 CORPORATE RADICAL ECO-INNOVATION ... 12 2.2. CORPORATE SUSTAINABILITY MOTIVATIONS ... 14 2.2.1 EXTRINSIC MOTIVATION ... 15 2.2.2 INTRINSIC MOTIVATION ... 16 2.2.3 CONSUMERS’ PERCEPTION ABOUT CORPORATE SUSTAINABILITY MOTIVATIONS ... 17 2.3 PSYCHOGRAPHIC VARIABLES INFLUENCING CONSUMER PERCEPTION ... 18 2.3.1 CONSUMER ENVIRONMENTAL KNOWLEDGE ... 19 2.3.2 CONSUMER ENVIRONMENTAL VALUES ... 20 2.3.3 CONSUMER ENVIRONMENTAL ATTITUDES ... 22 2.3.4 CONSUMER ENVIRONMENTAL BEHAVIOUR ... 23 3. RESEARCH METHODOLOGY ... 26 3.1 RESEARCH SETTING AND DATA COLLECTION ... 26 3.2 DEPENDENT VARIABLES ... 27 3.3 INDEPENDENT VARIABLES ... 28 3.4 MODERATING VARIABLES ... 28 3.5 CONTROL VARIABLES ... 30 4. RESULTS ... 31 4.1 DESCRIPTIVE STATISTICS ... 31 4.2 CORRELATIONS ... 33 4.3 HIERARCHICAL MULTIPLE REGRESSIONS ... 36 5. DISCUSSION ... 40 5.1 THEORETICAL FOUNDATIONS ... 40 5.2 LIMITATIONS OF THE STUDY AND DIRECTIONS FOR FUTURE RESEARCH .... 43 5.3 CONTRIBUTIONS TO EXISTING LITERATURE ... 44 5.4 PRACTICAL IMPLICATIONS ... 45 6. CONCLUSION ... 46 7. REFERENCES ... 47 8. APPENDIX ... 53
1.
INTRODUCTION
As humans consume goods and services, they contribute towards environmental change and degradation. Consumption not only depletes the earth of both renewable and non-renewable resources, but it also creates unmanageable quantities of solid waste and emits dangerous substances into the air, water and land (Connell, Kozar, 2014). In 2012, the Living Planet Report encountered the fact that humans overshoot the Earth’s biocapacity by approximately 50%, and provided evidence that humans are consuming beyond Earth’s carrying capacity and are contributing towards environmental vulnerability (World Wildlife Fund, 2012). These high consumption levels make materials or energy less available for future use, moves a biological system towards a different state, and threatens human health, (animal) welfare and other things that people value (Connell, Kozar, 2014). This environmental change is the result of two primary factors. The first is the pollution and waste generated through consumption and the second is the amount of (finite) natural resources expended through consumption (Connell, Kozar, 2014).
During the last couple of decades, pressure on these environmental sustainability issues have become very high in industries with significant environmental impact and high visibility in the public eye (Seuring, Müller, 2008). Companies are held responsible for environmental problems caused not only by themselves directly, but by their suppliers as well (Koplin, 2005). The apparel industry clearly demonstrates this development. Clothing is a basic human need and the apparel industry produces and retails goods in response to this demand (Hansen,
Schaltegger, 2013). At the same time, the environmental impact of the production and distribution of clothing in the apparel industry is immense. The production processes (the phases of dyeing, drying and finishing) make intensive use of chemicals and natural resources. The handling and use of fibres, such as cotton, wool and synthetics, require large quantities of water and pesticides, whereas synthetic fibres are extracted from non-renewable resources and require high levels of energy to produce (Caniato et al., 2012). Due to the apparel industry’s high public profile and its numerous media scandals (Lundblad, Davies, 2015), apparel companies experience pressure on sustainability issues exerted by its consumers (Caniato et al., 2012) and face a fundamental trade-off between focusing their efforts on the development of fashionable products (i.e. good economic performance) and minimising their environmental impacts (i.e. good environmental performance) (Illge, Preuss, 2012). Therefore many companies implement sustainable strategies in redesigning their supply chain to achieve coordination among stakeholders (e.g. consumers) and to find a balance among their economic and environmental performance (Li et al., 2014).
All these developments have been followed by the emergence of a sustainable fashion consumer movement in the 1990s (Guedes, 2011). Due to a renewed sensitivity towards the environment and social consciousness (Roberts, 1996), consumers look for a set of values that fulfil not only their need for style, but give the opportunity, through consumption, to contribute to environmental preservation and to the improvement of the ecological footprint of companies as well (Guedes, 2011). The growth in environmentally sustainable consumer behaviour and greater interest in sustainable apparel from a production side provides grounding for the emergence of a new consumer market for environmentally sustainable apparel and for companies within the industry to take action (Lundblad, Davies, 2015).
To react to the changing demands of the market and to play a role in the sustainable transformation of the apparel industry, companies take action by means of environmentally sustainable innovation, i.e. eco-innovation. This means that companies target for innovation in the form of a new product, new process, new market, new way of organizing the business or new sources of supply (Hellström, 2010). Depending on the newness of their offering, a company engages in either incremental innovation or radical innovation. This means, in other words, that the technology or process of the company can be significantly or only marginally different from its predecessors (Freeman, Soete, 1997). Hence, companies engaging in either incremental or radical innovation can be seen as adopters or generators of new technology, having different considerations for doing so (Damanpour, Wischnevsky, 2006). These considerations are based upon either the company’s intrinsic or extrinsic motivation to engage in eco-innovation. A company is perceived to be intrinsically motivated when it has concern over the well being of the earth and perceives being sustainable as a moral duty. A company is perceived to be extrinsically motivated when it seeks (financial) profitability or an increase in shareholder value (Graafland, Mazereeuw-Van der Duijn Schouten, 2012).
While the different types of eco-innovative companies being observed have specific attributions that exist independent of an observer, this research explores the theoretical mechanisms that influence an observer’s attention to and interpretation of a company engaging in environmentally sustainable innovation (Lange, Washburn, 2012). Corporate environmental sustainability attributions are rationally derived as the observer (i.e. consumer) considers the evidence about the firm’s behaviour and situation, but because those attributions are dependent upon the individual’s attention and interpretation, they are highly subjective (Fiske, Taylor, 1991). For this reason,
this research asks the following questions: To what extent do differences in eco-innovation of apparel companies engaging in environmental sustainable producing and retailing, have an effect on consumers’ evaluation of the companies’ sustainability motivations? And to what extent is this relationship affected by consumers’ knowledge, values, attitudes and behaviours towards sustainable consumption?
This research makes several contributions to theory and practice. First of all, this research looks at how organisational characteristics influence the type of innovation that the organisation or company engages in. This approach is known as the structural perspective on innovation, and, has been studied in academic research throughout the years (Dewar, Dutton, 1986; Damanpour, Gopalakrishnan, 1998; Johannessen et al., 2001; Damanpour, Wischnevsky, 2006). Although this topic has received quite some attention in existing literature, it has only been studied from a companies’ point of view and not yet in relation to consumers’ observation of organisational characteristics and perceptions of innovation. Therefore, this research contributes to this area within innovation literature. Second, this research considers how subjective understandings and interpretations about corporate innovation can add up to perceptions of corporate environmental sustainability. The objective is to achieve a better understanding of these kinds of effects, whereby characteristics of incremental and radical innovation within given situations predictably skew subjective perceptions and, in particular, an observer’s perception that a firm is environmentally sustainable. Understanding these effects is valuable not only for researchers but also for practitioners, since subjective perceptions help constitute the external environment within which the firm must exist and with which the firm must interact. Third, a lot of studies have been conducted on the subject of corporate
incremental and radical eco-innovation and the companies’ motivations to engage in sustainable innovation (Hellström, 2007; Hockerts, Wüstenhagen, 2010; Illge, Preuss, 2012; Plieth et al., 2012). However, no studies have been found to research the motivations of companies to engage in (sustainable) innovation from a consumer’s point of view. This will therefore be a contribution of this study to the field of innovation research. Finally, this research’s overall topic of innovation in the apparel industry is considered to be a fundamental component of entrepreneurship in the creative industries (Johannessen et al., 2001). Society is becoming more post-capitalist and knowledge-based (Drucker, 1993; Johannessen et al., 2001) and changes in the state of knowledge produce new disequilibrium situations (Jacobsen, 1992). These situations create opportunities for the generation and adoption of new types of innovation for companies and, consequently, new gaps in innovation research to be addressed.
This research is structured as follows: first, the literature on corporate eco-innovation and corporate sustainability motivations is reviewed and the hypotheses are presented. Second, the research methodology, data collection and measurement are described. Third, the results are presented and analysed in more detail in the discussion. Finally, the research is completed with a conclusion.
2. LITERATURE REVIEW
This chapter presents the existing literature related to the topic of this research. First, the literature on innovation theory is introduced, in which the concepts of incremental and radical innovation is embedded. Theoretical arguments are made for the differential effects of organisational characteristics on the generation of radical innovation and the adoption of incremental innovation. Second, the literature on
motivations is presented, emphasising extrinsic and intrinsic motivation. Finally, the literature on the concept of psychographic variables is presented, in which the distinction is made between consumer’s environmental knowledge, values, attitude and behaviour.
2.1 SUSTAINABLE TRANSFORMATION OF THE APPAREL INDUSTRY
The development of society’s stronger sustainable profile has forced businesses to acknowledge their environmental impact and influenced companies to engage in sustainable innovation. Sustainable innovation or eco-innovation has been broadly defined as the process of developing new ideas, behaviour, products and processes that contribute to a reduction in environmental burdens or to ecologically specified sustainability targets (Rennings, 2000). In order to achieve targets implied in sustainable development, existing technologies can be gradually improved or technological products and systems can be significantly reconstructed. In other words, innovations come to organisations in two ways: they are either generated or adopted (Damanpour, Gopalakrishnan, 1998).
Schumpeter initiated two competing perspectives on innovation, labelling them ‘entrepreneurial’ innovation and ‘corporate’ innovation (Damanpour, Wischnevsky, 2006). In agreement with the entrepreneurial view, innovation is the essence of new, independent companies that act as major agents of change in industries (Hagedoorn, Rooijakkers, 2002; Damanpour, Wischnevsky, 2006). According to the corporate view, the incumbent, established firm is the primary vehicle for innovation (Hagedoorn, Rooijakkers, 2002; Damanpour, Wischnevsky, 2006). In essence, both views on innovation coexist, since they relate to two different types of innovation. The smaller entrepreneurial players in industries generate radical new technologies, while the large incumbents favour the adoption of these new
technologies through incremental innovations. According to Dewar and Dutton (1986), the major difference between incremental innovation and radical innovation is both ‘the degree of novel technological process content embodied in the innovation and hence, the degree of new knowledge embedded in the innovation’ and the type of company that generates or adopts innovation.
Focusing on how different companies engage in innovation relates to the structural perspective on innovation. The structural perspective within innovation theory focuses on how organisational characteristics influence innovation and vice versa (Johannessen et al., 2001). Different organisational characteristics can lead to different innovation types (Gatignon, 2002). Organisational characteristics, identified as having an influence on innovation, are organisational size, age, specialisation, functional differentiation and external integration (Kimberly, Evanisko, 1981; Damanpour, Wischnevsky, 2006). In the context of this research, size and age of a company indicate the feasibility of sustainable innovation adoption or generation. The characteristic of specialisation represents the number and extensiveness of different production techniques used by a company to produce sustainable apparel. Functional differentiation indicates the extent to which a companies’ product range is divided into a number of different collections and to what extent sustainability is integrated into these collections. The final organisational characteristic, external integration, represents the communication about innovation in the organisational system, or in other words the companies’ sustainability mission (Kimberly, Evanisko, 1981).
2.1.1 CORPORATE INCREMENTAL ECO-INNOVATION
Incremental eco-innovation is characterized by minor improvements or simple adjustments in the current technology of a company (Dewar, Dutton, 1986).
Companies with incremental innovation have the competency to deliver (product) innovations that depart minimally from existing routines, operations, and knowledge (Menguc et al., 2014). This enables companies to enhance the value of their consumers without significantly disrupting or deviating from their consumer’s prior knowledge of the company and its practices (Menguc et al., 2014). Apparel companies that adopt incremental eco-innovation are considered large, established incumbents and are often referred to as ‘Greening Goliaths’ (Hockerts, Wüstenhagen, 2010).
When looking at the companies’ characteristics, established international apparel companies are large in size and are considered incumbents in the apparel industry having gained a large market share during many years. These companies are traditionally recognised by customers for their mass-produced apparel (Caniato et al., 2012). The established international apparel companies are focused in their business model on high volume of sales, but have decided to incorporate environmental aspects into a new concept of quality (Caniato et al., 2012).
In the early stages of the fashion industry’s sustainability transformation, established international apparel companies reacted to pressures from stakeholders concerned about sustainability by implementing incremental changes to their traditional business model (Caniato et al., 2012). They are positioning themselves in the sustainable (or “green”) segment of the apparel industry by introducing sustainable apparel within their collections and thereby trying to clean up their polluting supply chain, without radically changing it. Often a small portion of the company’s overall collection consists of environmentally sustainable clothing – environmentally sustainable in both the manufacturing process as in the fabrics used. Adapting their full product range to the highest environmental sustainability standards
will hardly ever be an option for reasons of scale, but due to their superior market power and financial resources they have the advantage of catching-up quickly with sustainability innovations introduced by the small sustainable entrepreneurial companies and become fast followers in the market (Hockerts, Wüstenhagen, 2010).
2.1.2 CORPORATE RADICAL ECO-INNOVATION
Radical eco-innovation is characterized by fundamental changes in a company’s business model that represent revolutionary changes in technology – there are clear departures from existing practice (Dewar, Dutton, 1986). Companies with radical innovation have the ability to deliver products that are new to the world in that they involve breakthrough technologies and consumer benefits that drastically alter the way products are made and experienced (Menguc et al., 2014). Apparel companies that adopt radical eco-innovation are considered small, young and entrepreneurial and are often referred to as ‘Emerging Davids’ (Hockerts, Wüstenhagen, 2010).
When considering the companies’ characteristics, small entrepreneurial apparel companies are, as the name implies, small companies and rather new in the apparel industry having gained an influential, but small market share since the last couple of years. They are motivated to break the existing rules of the apparel industry and promote disruptive solutions to environmental problems (Gardetti, Muthu, 2015). These apparel companies are specifically known for producing 100% environmentally friendly clothing collections. They do this within their own internal manufacturing processes, focusing on the adoption of local, clean and natural production processes (Caniato et al., 2012). They have redesigned the outbound supply network by selling products directly to end customers, which allowed them to obtain higher margins, to
reduce selling prices and to invest in environmentally sustainable practices (Caniato et al., 2012).
Small entrepreneurial apparel companies are the pioneers of the transformation of the apparel industry towards environmental sustainability. They reacted to the environment’s need and market’s desire to handle natural resources with care and produce more sustainably. The companies were fast movers, because they are less constrained by existing realities than the large incumbents, have less vested interest in the status quo of the apparel industry, and have less to lose and more to gain from innovation (Gardetti, Muthu, 2015). Being often run by idealists, these companies are less likely to be caught in a specific technological mindset and more likely to try out innovative approaches (Hockerts, Wüstenhagen, 2010).
What is similar to the two groups of sustainable companies is that both of them are considered progressive in their attitudes toward engaging in sustainable practices (Caniato et al., 2012). However, since they do this in rather two varying ways, the companies can be evaluated differently according to their varying level of innovation and their observable company characteristics. In table one, the observable company characteristics that distinguish established international apparel companies (i.e. incremental eco-innovation) from small entrepreneurial apparel companies (i.e. radical eco-innovation) are outlined.
Table 1 – Observable company characteristics for the consumer
Company
characteristics Incremental Eco-Innovation Radical Eco-Innovation
Age Old, incumbent company New, young company Size Large Small
Functional differentiation (Sustainable product range) Small portion of the company’s overall product range consists of environmentally sustainable apparel (e.g. one ‘eco’ collection) Company's overall product range consists of environmentally sustainable apparel Specialisation (Use of production techniques) Adoption of new technologies, invented by others in the industry. Inventing breakthrough technologies that are new to the industry External integration
(Mission) Reducing the company's impact on the environment, by efficiently using less natural resources than they have used in the past and by minimising waste. Maintain position as non-polluting company, by conserving natural resources and cutting out waste. Knowing how different organisational characteristics lead to different types of innovation, the question rises whether these characteristics also have an influence on the motivation of companies to engage in sustainable innovation.
2.2. CORPORATE SUSTAINABILITY MOTIVATIONS
Corporate Social Responsibility (CSR), in the specific context of environmental protection, is a concept that has attracted worldwide attention in both the academic and the business world. The fundamental principal of CSR is that companies have an obligation to work towards meeting the needs of a wider array of stakeholders (Waddock et al., 2002; Jamali, Mirshak, 2007). However, according to Jamali and Mirshak (2007), the idea emerges that ‘companies should transition from a state of mere compliance to a mode of engagement, from harm minimization to value creation’. Skeptics believe that CSR is only a sound business practice that serves to distract consumer’s focus on striving for economic profitability (Clement-Jones, 2005; Jamali, Mirshak, 2007). Proponents, however, view CSR as essential for successful business practices and also for creating wider concern for environmental issues and to look beyond narrow economic business incentives (Jamali, Mirshak,
2007). These ideas, concerning the different ways to view CSR, underlie the differences in motivation for companies to be environmentally sustainable.
According to Ryan and Deci (2000), to be motivated means to be moved to do something. Motivation is initiated because of an internal drive or external demand, which can be explained as the orientation of the motivation. Orientation of motivation involves the underlying attitudes and goals that give rise to action – i.e. it concerns the reasons for actions (Ryan, Deci, 2000). Based on the Self-Determination Theory, two different types of motivation are distinguished due to the different reasons or goals that raise action (Deci, Ryan, 1985). The first type is extrinsic motivation and the second type is intrinsic motivation. Companies that react to pressures in the form of eco-innovation, change their existing business for either extrinsic or intrinsic motivations. When being extrinsically motivated, companies feel obliged or are made to do it by their stakeholders. When being intrinsically motivated, companies want to change out of own concern for the environment and the impact that their practices can have it (Van Marrewijk, 2003).
2.2.1 EXTRINSIC MOTIVATION
Extrinsic motivation can be defined as ‘a construct that pertains whenever an activity is done in order to attain some separable outcome’ (Ryan, Deci, 2000). This means that companies can be motivated to engage in sustainable innovation, because it contributes to the long term financial performance of the company or to increased shareholder value in the long run (Graafland, Mazereeuw-Van der Duijn Schouten, 2012). Companies investing in eco-innovation (e.g. pollution prevention) reduce costs for waste, energy, packaging and transportation, and improve the their reputation in the consumer market (Miles, Covin, 2000). Extrinsic motivation is a company’s
incentive when their freedom of action becomes curtailed by social demands that require them to assume responsibility for action that they are not primarily or intrinsically interested in (Ryan, Deci, 2000). It is assumed that when external drivers play a key role for a company, their focus is on incrementally adopting new technologies in their existing business practices (Gilson, Madjar, 2011).
2.2.2 INTRINSIC MOTIVATION
Intrinsic motivation is defined as ‘the doing of an activity for its inherent satisfactions rather than for some separable consequence’ (Ryan, Deci, 2000). This means that a company’s personal beliefs and values are the important incentive to engage in sustainable innovation. The moral duty to be environmentally responsible is derived from a company’s feeling of being obliged to prevent environmental deterioration because it is the right thing to do (Graafland, Mazereeuw-Van der Duijn Schouten, 2012). The belief is that intrinsic motivation allows companies to take risks, try new things and be experimental in their practices, and persist to the point of breakthrough (Gilson, Madjar, 2011). This means that breakthrough sustainable technologies and practices, or radical eco-innovation, are more likely to occur when companies are intrinsically motivated to engage in producing sustainable products.
Hence, for incremental eco-innovation, rewards or external drivers should be a key motivating force, whereas for radical eco-innovation, experimentation and breakthrough technologies should be a key driver (Gilson, Madjar, 2011). If consumers are able to observe organisational characteristics related to eco-innovation, then how do they perceive the motivating forces of companies to engage in different types of eco-innovation?
2.2.3 CONSUMERS’ PERCEPTION ABOUT CORPORATE SUSTAINABILITY MOTIVATIONS
Perceived corporate motivation for engaging in eco-innovation is likely to influence consumers’ attitude toward companies and their sustainable initiatives (Becker-Olsen et al., 2006). According to Becker-Olsen et al. (2006), ‘consumers’ perceptions of the underlying motivations for the act of eco-innovation may drive their evaluations of the company and impact their beliefs, attitudes and behaviour’. Attribution theory provides the basis for the argument that consumers try to understand companies’ motivations embedded in the companies’ characteristics or attributes (Becker-Olsen et al., 2006; Lange, Washburn, 2012). Consumers’ preferences for and evaluations of companies are formed on the attributes that those companies possess and the values that those attributes hold for individual consumers (Jackson, 2005). A consumer reacts to a company and its behaviour based on perceptions, not objective reality (Wry, 2009). Thus when presented with evidence of a company’s involvement in eco-innovation, consumers are likely to assign one of the two types of motivation to the company: either them being extrinsically or intrinsically motivated (Becker-Olsen et al., 2006). This research proposes that when companies have observable characteristics related to incremental innovation, motivations are considered by consumers to be extrinsic; when companies show characteristics connected to radical innovation, motivations are considered by consumers to be intrinsic.
Thus, it is expected that consumers perceive companies with incremental innovation to have dominating extrinsic motivations, and companies with radical eco-innovation to have dominating intrinsic motivations. These perceptions are based on the observable characteristics of the company engaging in either type of innovation. As is mentioned above, these characteristics are age, size, specialisation, functional
differentiation and external integration (Kimberly, Evanisko, 1981). Based on this reasoning, it is hypothesized that:
H1: Corporate incremental eco-innovation is positively related to perceived corporate extrinsic motivations.
H2: Corporate radical eco-innovation is positively related to perceived corporate intrinsic motivations.
2.3 PSYCHOGRAPHIC VARIABLES INFLUENCING CONSUMER PERCEPTION This research also aims to understand whether the relationships that are expected between corporate eco-innovation (incremental vs. radical) and perceived corporate motivations (extrinsic vs. intrinsic) are stronger for consumers that have personal characteristics corresponding positively to environmental sustainability. These personal characteristics are environmental knowledge, values, attitudes and behaviours and are collectively labelled psychographic variables (Fraj, Martinez, 2006). Psychographics can be defined as psychological, sociological and anthropological factors that determine how consumers make a particular decision about a product, person or ideology (Demby, 1989, p. 21, in: Barry, Weinstein, 2009). Psychographics are used as a construct in this research for explaining if and how consumers assign a specific type of motivation to companies engaging in either incremental or radical eco-innovation (Robertson, Wind, 1980) (i.e. determining how consumers link their perception of company characteristics to the company’s ideology on eco-innovation). Findings could clarify the role of consumers’ personal characteristics in shaping their responses to the type of eco-innovation that reflects a
companies’ ideological commitment to sustainability (Hyllegard et al., 2006). Although environmental knowledge, values, attitude and behaviour are grouped together under the umbrella of psychographic variables, the concepts can distinctively be defined as having a major implication on how consumers form perceptions about organisational characteristics of companies engaging in eco-innovation and, consequently, which type of motivation they assign to them (Fraj, Martinez, 2006).
2.3.1 CONSUMER ENVIRONMENTAL KNOWLEDGE
Knowledge about the environment and environmental issues need to be present in the minds of consumers in order for them to form an opinion about companies engaging in environmentally sustainable innovation (Barber et al., 2009; Polonsky et al., 2012). Environmental knowledge can be defined as ‘a general knowledge of facts, concepts and relationships concerning the natural environment and its major ecosystems’ (Fryxell, Lo, 2003). Hence, environmental knowledge concerns what individuals or consumers know about the environment, the key relationships leading to environmental impacts and collective responsibilities necessary for sustainable development (Mostafa, 2007). Consumers’ environmental knowledge can be more general in nature, such as awareness of environmentally sustainable products, or more specific, such as knowledge of recycling or sustainable programs in companies (Schahn, Holzer, 1990). Increased knowledge of environmental issues is assumed to change an individual’s values and attitudes, which in turn influences their environmentally sustainable consumption behaviour (Polonsky et al., 2012). A consumer that is concerned about the environment is also more inclined to contribute towards protecting it. However, in order to contribute to that, a consumer must first of all possess knowledge or be aware of the main environmental issues that are currently facing. Thus, having a better understanding of environmental knowledge is assumed
to increase the likelihood that a consumer is also informed about companies’ strategies to innovate in terms of sustainability. If that is the case, it is also expected that consumers form an opinion about the companies’ motivations to do so. Following these thoughts, it is hypothesized that:
H3a: The higher consumers’ environmental knowledge, the stronger the positive effect of corporate incremental eco-innovation on perceived corporate extrinsic motivation.
H3b: The higher consumers’ environmental knowledge, the stronger the positive effect of corporate radical eco-innovation on perceived corporate intrinsic motivation.
2.3.2 CONSUMER ENVIRONMENTAL VALUES
Values are abstract principles, which are central to a person’s concept and self-identity. They act as guides for evaluating situations and determining a person’s social and ideological positions (Dickson, 2000). More specifically, values are referred to as relatively stable beliefs about the personal or social desirability of certain behaviours. Values express the goals and needs that motivate people and appropriate ways to attain these (Vermeir, Verbeke, 2006). Not all values are tapped for every situation encountered, but they are believed to exert a steady influence on attitudes and behaviours, because they are centrally held and resistant to change (Dickson, 2000). This makes a clear distinction with knowledge, since knowledge is factual and required over time, therefore being subject to change.
It is proposed that a person’s environmental self-identity depends on biospheric values, which is likely to affect a range of pro-environmental attitudes and
behaviours (Van der Werff et al., 2014). Biospheric values reflect personal beliefs about the quality of nature and the environment (Steg et al., 2014). This means that people who strongly endorse biospheric values have strong beliefs about the preservation of nature and the environment as such, and more strongly base their judgments and decisions to engage in particular actions on the consequences of their values for nature and the environment (Van der Werff et al., 2014). Consumers who endorse strong biospheric values tend to find it important that companies that engage in eco-innovation, do this for the reason of endorsing environmental values, inherent satisfaction and importance of taking care of the environment (De Groot, Steg, 2008, 2010; Steg et al., 2014). Consumers are expected to observe through organisational characteristics that entrepreneurial companies enlist oneself to produce 100% sustainable apparel only. Based on this observation, they are expected to ascribe intrinsic motivations to this form of radical eco-innovation. For incumbent companies, the reasoning holds that organisational sustainable practices are not only based on biospheric values, but on the value of wealth creation as well (Jamali, Mirshak, 2006). Therefore, consumers are expected to ascribe extrinsic motivations to their engagement in eco-innovation. Based on these arguments, it is hypothesized that:
H4a: The higher consumers’ environmental values, the stronger the positive effect of corporate incremental eco-innovation on perceived corporate extrinsic motivation.
H4b: The higher consumers’ environmental values, the stronger the positive effect of corporate radical eco-innovation on perceived corporate intrinsic motivation.
2.3.3 CONSUMER ENVIRONMENTAL ATTITUDES
Attitudes, the positive or negative evaluations of the qualities of a specific object or behaviour, are significant drivers of consumers’ ecological identity. The attitudes that are usually included in this identity are (1) perceived consumer effectiveness (PCE) and (2) the degree of environmental concern (Connell, Kozar, 2014).
The extent to which consumers believe that their behaviour would be effective at diminishing environmental impact and at affecting environmental problems, or their PCE, is one of the attitudinal factors differentiating between consumers’ intended commitment to pro-environmental behaviour and their actual commitment to it (i.e. their environmental behaviour) (Connell, Kozar, 2014). The more a consumer believes that individual consumption affects environmental issues, the more the consumer will have a positive attitude towards non-polluting consumer behaviour (Balderjahn, 1988). This suggests that when consumers believe that they have the ability to contribute towards solving environmental problems, they are much more likely to actually engage in environmentally sustainable consumption behaviour (Connell, Kozar, 2014).
The level of environmental concern that a consumer has is also an important attitudinal factor to a consumer’s environmental identity. According to Dunlap and Jones (2002), ‘environmental concern is the extent to which an individual is troubled about environmental vulnerability, the consequences of this vulnerability, and the inadequate nature of actions taken to ensure environmental protection’. It is found that consumers who express more environmental concern display higher levels of environmental consciousness within their attitude towards consumer behaviour (Hartmann, Apaolaza-Ibañez, 2012). Also, consumers are found to be sensitive towards companies’ attitude towards engaging in environmentally sustainable practices (Flammer, 2013). Therefore it is expected that environmental consciousness
in a consumer’s attitude enables consumers to observe high environmental consciousness and concern in entrepreneurial companies’ characteristics as initiated from within the company and lower environmental consciousness and concern in incumbent’s organisational characteristics as pressured from outside the company. Based on this reasoning, it is hypothesized that:
H5a: The higher consumers’ environmental attitudes, the stronger the positive effect of corporate incremental eco-innovation on perceived corporate extrinsic motivation.
H5b: The higher consumers’ environmental attitudes, the stronger the positive effect of corporate radical eco-innovation on perceived corporate intrinsic motivation.
2.3.4 CONSUMER ENVIRONMENTAL BEHAVIOUR
Behaviour is, broadly speaking, concrete, intentional actions taken by individuals and groups, often rooted in values and attitudes (Connell, Kozar, 2014). More specifically, consumer behaviour is ‘the behaviour that consumers display in searching for, purchasing, using, evaluating, and disposing of products and services which they expect to meet their needs’ (Schiffman, Kanuk, 2010). As is already mentioned, environmentally sustainable apparel consumption involves the acquisition of apparel that is more preferable than mainstream apparel consumption, due to the need for engaging in behaviour that is: (1) to create less pollution and/or (2) to consume fewer natural resources (Connell, 2011; Connell, Kozar, 2014). Therefore, the following are considered environmentally sustainable consumption behaviours: purchasing apparel made from environmentally friendly or recycled materials; purchasing apparel only
when needed; purchasing apparel from environmentally sustainable companies (Perry, Chung, 2016).
Fundamental to consumer environmental behaviour is that individuals consciously seek for sustainable apparel companies to fulfil their needs in environmentally sustainable clothing consumption (Chan, Wong, 2012). Frequent sustainable apparel purchases enable involvement of consumers in the sustainable apparel market, which is expected to create familiarity with different types of sustainable companies existing in this apparel market. When familiar with organisational characteristics of companies engaging in either incremental or radical innovation, consumers are expected to perceive differences between these forms of innovation and its underlying motivations. Based on this reasoning, the following statements are hypothesized:
H6a: The higher consumers’ environmental behaviour, the stronger the positive effect of corporate incremental eco-innovation on perceived corporate extrinsic motivation.
H6b: The higher consumers’ environmental behaviour, the stronger the positive effect of corporate radical eco-innovation on perceived corporate intrinsic motivation.
Corporate Incremental Eco-Innovation
CE
Values Attitude CE Behaviour CE
H1
H3a H4a H5a
CE Knowledge H6a Corporate Radical Eco-Innovation Perceived Corporate Extrinsic Motivation Perceived Corporate Intrinsic Motivation H3b H4b H5b H6b H2
3. RESEARCH METHODOLOGY
This chapter first of all discusses the empirical setting of this research. The sections of the research setting, the data collection and the operationalization of the variables (dependent, independent, moderators and control) will be subsequently described.
3.1 RESEARCH SETTING AND DATA COLLECTION
The empirical setting of this research is innovative companies in the sustainable apparel industry. In the sustainable apparel industry engagement in sustainable innovation by companies can be tested through two types of innovation: incremental innovation and radical innovation. In the study these types of innovation will be manipulated by the use of vignettes with an experimental between-subjects design. The population that is of interest for this study is consumers that identify themselves as being interested in the sustainable apparel industry and concerned with companies’ sustainable production practices. Respondents were recruited to take part in the survey via online channels, such as university e-mail, social media and fashion forums devoted to subjects of environmental sustainability, sustainable industries and sustainable apparel.
This research is based on a quantitative vignette in survey study (see Appendix 1 for survey and vignettes). The survey was used as the instrument to collect cross-sectional data. Respondents were all shown the same questions, but were randomly assigned to one of the three vignettes. The vignettes represented the About Us page for (1) a company with general sustainable innovation, (2) a company with incremental sustainable innovation and (3) a company with radical sustainable innovation. The first group served as the control group for the study. The manipulations in the vignettes were based on the type of innovation that a company
engaged in, indicated by the organisational characteristics that have been identified earlier in this research: the company’s size, age, specialisation (use of production techniques), functional differentiation (product range), and external integration (sustainability mission) (Kimberly, Evanisko, 1981). As is already stated, according to the structural perspective of innovation theory, these organisational characteristics influence and signal the type of innovation that a company adopts or generates (Johannessen et al., 2001). The goal of this vignette experiment was to present respondents with companies engaging in different types of sustainable innovation and to test for differences in respondent’s perceptions about the companies’ motivations to engage in that particular type of sustainable innovation.
To analyse the collected data, hierarchical multiple regressions were performed. This statistical test was chosen, because of the nature of the variables: each hypothesised main effect has one interval dependent variable and two categorical independent variables or treatments. Besides, this statistical test is used to assess the effect of the four moderating variables. To test moderation, the interaction effects between the moderators and the treatments is analysed and whether this effect is significant in predicting the dependent variables.
3.2 DEPENDENT VARIABLES
This study measures two dependent variables based on the overlapping concept of consumer’s perceived company sustainability motivations. These variables will be referred to and operationalized as extrinsic motivation and intrinsic motivation in this research, using the measurement scales of Brønn and Vidaver-Cohen (2009). The extrinsic motivations scale consisted of 10 items measuring profitability motivations and legitimacy motivations with a Cronbach’s alpha of 0.76. The intrinsic motivations
scale consisted of 3 items measuring sustainability motivations with a Cronbach’s alpha of 0.56.
3.3 INDEPENDENT VARIABLES
The independent variable in this study is corporate sustainable innovation. This variable has three different levels, namely (1) corporate general eco-innovation, (2) corporate incremental eco-innovation, and (3) corporate radical eco-innovation. These different levels of the independent variable were treated as three independent groups.
3.4 MODERATING VARIABLES
In this study, four moderating variables were used. These four variables were consumer’s environmental knowledge, environmental values, environmental attitudes, and environmental behaviour.
Consumer environmental knowledge (abbreviated CE knowledge) was operationalized as the perceived abstract level of knowledge about environmental issues and the apparel industry (Dickson, 2000; Mostafa, 2007). The measurement scale of environmental knowledge consisted of 5 items, combined from the studies of Dickson (2000) and Mostafa (2007). The items together have a Cronbach’s alpha of 0.83. Respondents indicated their level of knowledge of environmental issues on a 7-point Likert scale ranging from 1 = strongly disagree to 7 = strongly agree.
Consumer environmental values (abbreviated CE values) was operationalized as biospheric values (Steg et al., 2014). The measurement scale of biospheric values had 4 items, representing four values, and its Cronbach’s alpha is 0.87. Respondents rated the importance of these four values “as guiding principles in their lives” on a 7-point scale ranging from 1 = opposed to my principles, 2 = not important, 3 =
unlabelled, 4 = important, 5 = unlabelled, 6 = very important, to 7 = extremely important. Commonly a 9-point scale is used in research (Schwartz, 1992; Dietz et al., 2005; Steg et al., 2014), where the respondents rate values from -1 = opposed to my values, to 7 = of supreme importance. However, in this study a 7-point scale was used to improve the consistency of scoring scales in the survey and to improve the scale’s clarity for respondents, since the 9-point scale has four unlabelled numbers (opposed to two unlabelled numbers in the 7-point scale) (Stern et al., 1998).
Consumer environmental attitude (abbreviated CE attitude) was operationalized as environmental concern (EC) and perceived consumer effectiveness (PCE). The measurement scale of EC was used from the study of Kim and Choi (2005). The scale had 5 items, of which the 3 items with the highest individual Cronbach’s alpha were used. The measurement scale of PCE was used from the study of Straughan and Roberts (1999) and had 4 items. Merging the items of EC and PCE into one scale, its Cronbach’s alpha is 0.77.
Consumer environmental behaviour (abbreviated CE behaviour) was operationalized as purchase intensity. Respondents needed to indicate the extent to which they engaged in purchasing environmentally sustainable clothing on a five-point scale anchored with (1) never, (2) rarely, (3) sometimes, (4) often, and (5) always (Kim, Choi, 2005).
Due to the extensiveness of the variable titles, the variables will be referred to as intrinsic motivation, extrinsic motivation, corporate eco-innovation (control group), corporate incremental eco-innovation, corporate radical eco-innovation, CE knowledge, CE values, CE attitude and CE behaviour further in this research. Table 2
shows the variables with the Cronbach’s alpha measured in this research. In Appendix 2 a table is added with all items of the scales used in the survey.
Table 2 – Variables and corresponding Cronbach’s alphas
Variables Cronbach’s alpha Extrinsic Motivation .760 Intrinsic Motivation .559 CE Knowledge .833 CE Values .874 CE Attitude .767 3.5 CONTROL VARIABLES
Early studies in the 1970s and 1990s (Berkowitz, Lutterman, 1968; Anderson, Cunningham, 1972; Schwartz, Miller, 1991; Butler, Francis, 1997), as well as recent studies (Finisterra do Paço, Raposo, 2010; Han et al., 2010) revealed that there is a significant effect of demographic characteristics on consumers’ knowledge, values, attitudes and behaviour towards environmental sustainability. Results of the studies showed that demographic characteristics influenced general environmental knowledge, values and attitudes, which in turn influenced apparel environmental attitudes and ultimately impacted apparel consumption behaviour. I am not primarily interested in measuring the effects of demographic characteristics on consumers’ subjective understandings and interpretations of firm’s motivations to engage in sustainable clothing manufacturing, but there is an expected correlation. In order to account for the potential confounding effect of gender, age, education and income, these background characteristics have been included in the analysis as control variables.
4. RESULTS
In this chapter, the results of the data analysis are presented. The descriptive statistics and the correlations are described first, after which the result of the regression analysis and moderations are discussed.
4.1 DESCRIPTIVE STATISTICS
The total sample consisted of 227 respondents, of which 61,5% were female and 38,5% were male. The average age of the sample was 33.16 years, but most of the respondents were between 21 and 26 years old (44,9%). Within the overall sample, most people enjoyed an academic education and earn €1.000 or less net income per month. This might indicate that many academic students participated in the research. Furthermore, the total sample was distributed into three subsamples: a sample for corporate general eco-innovation (control group), a sample for the group of corporate incremental innovation and a sample for the group of corporate radical eco-innovation. The three subsamples consist of respectively 78, 75 and 74 respondents.
In Table 3 the descriptive statistics for this research are presented. The analysis was started by a check of frequencies to search for any errors in the data. There were no errors found. Missing data was dealt with by excluding cases pairwise to reduce the small subsample sizes as little as possible. To assure that there were no counter-indicative items, items that are phrased so that an agreement with the item represents a low level of the construct being measured were recoded into different variables. This means that rPCE1 and rPCE3 have been recoded and now represent PCE1 and PCE3.
Next, normality checks were performed to examine if all the variables had a normal distribution. These checks indicated that the variables CE knowledge, CE
values, CE attitude, CE behaviour, intrinsic motivation and extrinsic motivation were normally distributed, meaning that the skewness and kurtosis is between -2 and +2 (George and Mallery, 2016). The normal distribution for CE values and CE attitude was an outcome of performing an outliers check and excluding the outliers from the analysis.The variables corporate general innovation, corporate incremental eco-innovation and corporate radical eco-eco-innovation were not normally distributed. The distribution is moderately negatively skewed for CE values, intrinsic motivations, and extrinsic motivations. CE attitudes is moderately skewed and pointy with many scores in the tails. The distribution is approximately symmetric for the rest of the variables. To check for robustness, the Levene’s test of homogeneity of variance was performed for the data of extrinsic and intrinsic motivation. This test indicated that it was not significant, meaning that the variances between extrinsic motivation and intrinsic motivation are not statistically different from each other (resp., F (2, 197) = .84, p = .431; F (2, 197) = .13, p = .876).
A reliability check was performed to indicate the extent to which the data collection technique or analysis procedure yields consistent findings (Saunders et al., 2009). This check indicated that the scales of CE knowledge, CE value, CE attitude and extrinsic motivations have high reliability, with Cronbach’s alphas of respectively .833, .874, .767 and .760. Only the scale of intrinsic motivations has low reliability, with Cronbach’s alpha = .559. The corrected item-total correlations for this scale shows that two of the three items are above .30, which means that these two items have an acceptable correlation with the total score of the scale. However, the third item has a corrected item-total correlation of .285.
Table 3 – Descriptive Statistics
Variable N Minimum Maximum Mean Std. Deviation 1. Gender 192 1 2 1.61 .488 2. Age 192 18 74 33.16 14.755 3. Education 192 1 6 4.39 .937 4. Income 189 1 4 1.99 1.039 5. CE Knowledge 227 1.00 7.00 4.0722 1.15432 6. CE Values 227 2.75 7.00 5.5396 .91302 7. CE Attitude 227 1.86 6.00 4.4525 .55129 8. CE Behaviour 227 1 5 2.52 .942 9. Intrinsic Motivation 200 2.00 6.67 4.9133 .92803 10. Extrinsic Motivation 200 2.00 6.86 4.8950 .80373
11. Corporate General
Eco-Innovation 227 0.00 1.00 .3436 .47596 12. Corporate Incremental
Eco-Innovation
227 0.00 1.00 .3304 .47140
13. Corporate Radical Eco-Innovation 227 0.00 1.00 .3260 .46978 4.2 CORRELATIONS
In table 4 the correlations for this research are presented. The table shows that corporate eco-innovation (control group), corporate incremental eco-innovation and corporate radical eco-innovation do not have a significant correlation with perceived corporate extrinsic motivation or perceived corporate intrinsic motivation. The dependent variables of extrinsic and intrinsic motivation have a significant positive correlation with each other (r = .405, p < .01). In turn, the dependent variables have significant positive correlations with the moderating variables of CE knowledge, CE values, CE attitude and CE behaviour. Extrinsic motivation is significantly positively correlated with all four moderators (resp., r = .248, p < .01), CE values (r = .335, p
motivation only shows a significant positive correlation with the first three moderators (resp., r = .202, p < .01; r = .330, p < .01; r = .265, p < .01).
Further, the table shows some interesting correlations between the moderating variables. CE knowledge has a significant positive correlation with CE values, CE attitudes and CE behaviour. This could suggest that the more knowledge a consumer has on environmental issues in general, and specifically about issues in the apparel industry, the higher the chance that this consumer adjusts his or her values and attitude towards environmental preservation and acts upon this by consuming environmentally sustainable clothing. Also, the significant positive correlation that CE values has with CE attitude (r = .498, p < .01) and CE behaviour (r = .375, p < .01) suggest a similar effect. This correlation could suggest that the values that a consumer has regarding environmental sustainability affect the consumer’s attitude and behaviour in the end. Thus, the higher a consumer values protection of the environment, the more likely it is that they have a positive attitude towards sustainability and find consuming sustainable apparel important. The significant positive correlation between CE attitude and CE behaviour (r = .300, p < .01) reinforces the likelihood of this suggested effect.
4.3 HIERARCHICAL MULTIPLE REGRESSIONS
Hierarchical multiple regression analysis is used to examine the direct relationship between the independent and dependent variables, and the effect of moderating variables on these relationships. The following main effects are being analysed:
1. corporate incremental eco-innovation and perceived corporate extrinsic motivation; 2. corporate radical eco-innovation and perceived corporate intrinsic motivation;
Before performing the analyses, eight assumptions needed to be tested in order for multiple regression to give a valid result. The first two assumptions refer to the nature of the variables and these are met. Assumptions 3, 4 and 5, of respectively independence of observations, linear relationships between the variables and homoscedasticity, have also been met. To meet assumption 6, 7 and 8, the data was tested for multicollinearity, outliers and normal distribution. The test for multicollinearity indicated that all VIF values were below 10, indicating lack of evidence of multicollinearity (Myers, 1990), and all values for tolerance were above .20 (Menard, 1995). As is already mentioned in the section above about descriptive statistics, outliers were excluded from the research and residuals were approximately normally distributed.
a The dependent variable is Perceived Corporate Extrinsic Motivation b The dependent variable is Perceived Corporate Intrinsic Motivation
The standardized regression coefficients are reported Statistical significance: *p < .05; **p < .01; ***p < .001
Variables Corporate Extrinsic Motivation Corporate Intrinsic Motivation Model 1a Model 2a Model 3a Model 4b Model 5b Model 6b
Controls Gender .084 .085 .078 .214** .214** .219** Age .023 .018 .010 .124 .124 .153 Education (ref: Academic Education) Primary Education .135* .134 .138* .075 .074 .082 Secondary Education .071 .062 .083 .044 .041 .041 Vocational Education .009 -.001 .015 .080 .077 .069 Higher Education -.053 -.051 -.021 -.010 -.011 -.032 Post-Academic Education .036 .027 -.007 .057 .054 .055 Income .018 .022 .005 .041 .041 .029 CE Knowledge .062 .048 -.084 .109 .105 .105 CE Values .173* .185* .269* .233** .237** .299* CE Attitude .273** .277** .361*** .102 .103 .131 CE Behaviour .043 .051 -.017 -.125 -.123 -.187 Independent Variables Corporate General Eco-Innovation (ref) Corporate Incremental Eco-Innovation .037 .500 Corporate Radical Eco-Innovation -.004 .086 Interactions Incremental Eco-Innovation x CE Knowledge .675* Incremental Eco-Innovation x CE Values -.537 Incremental Eco-Innovation x CE Attitude -.821 Incremental Eco-Innovation x CE Behaviour .267 Radical Eco-Innovation x CE Knowledge .023 Radical Eco-Innovation x CE Values -.050 Radical Eco-Innovation x CE Attitude -.327 Radical Eco-Innovation x CE Behaviour .291 R2 .239 .252 .299 .198 .199 .208 F 4.596 4.176 4.023 3.628 3.095 2.475 N 189 189 189 189 189 189
Table 5 shows the results of the hierarchical multiple regression analyses. Model 1 examines whether there is a direct relationship between the control variables and the first dependent variable of perceived corporate extrinsic motivation. In this first step, a control model including gender, age, dummy variable for education (academic education as the reference category), income, CE knowledge, CE values, CE attitude and CE behaviour was estimated (Model 1: R2 = .24 p < .001). This shows that only CE values and CE attitudes have a positive
significant on perceived corporate extrinsic motivation (resp., β = .17, p < .05; β = .27, p < .01).
In Model 2, the treatment corporate incremental eco-innovation was added, with the reference group of corporate general eco-innovation. This model allows for testing hypothesis 1. Hypothesis 1 states that corporate incremental eco-innovation has a positive effect on perceived corporate extrinsic motivation. However, the model shows that the coefficient for the treatment is not significant, indicating that hypothesis 1 is not supported.
In Model 3, the interaction terms of CE knowledge, CE values, CE attitude and CE behaviour with corporate incremental eco-innovation were added to the analysis to test for hypotheses 3a, 4a, 5a and 6a. These hypotheses suggest that high values for the moderators of CE knowledge (H3a), CE values (4a), CE attitude (H5a) and CE behaviour (H6a) strengthen the positive effect of corporate incremental eco-innovation on perceived corporate extrinsic motivation. The model shows that there is a positive significant interaction effect between CE knowledge and corporate incremental eco-innovation (β = .67, p < .05). This means that H3a is supported and that the effect of corporate incremental eco-innovation on perceived corporate extrinsic motivation is different for low CE knowledge and high CE knowledge. Figure 1 visualises the interaction effect. It illustrates that when the environmental knowledge of consumers increases, their perception about companies engaging in incremental eco-innovation for extrinsic motivations increases as well.
Figure 1 – Interaction between corporate incremental eco-innovation and CE knowledge
Model 4 tests whether there is a relationship between the control variables and the second dependent variable of perceived corporate intrinsic motivation. This model shows that gender and CE values have a positive significant effect on the perceived corporate intrinsic motivation (resp., β = .21, p < .01; β = .23, p < .01).
In Model 5, the treatment corporate radical eco-innovation was added to the analysis, with the reference group of corporate general eco-innovation. This model tests for the second main hypothesis, stating that corporate radical eco-innovation positively affects perceived corporate intrinsic motivation. This model shows that the coefficient for the treatment is not significant and, therefore, hypothesis 2 is not supported.
In Model 6, the abovementioned four interaction terms were included in the analysis in order to test for hypotheses 3b, 4b, 5b and 6b. These hypotheses state that high CE knowledge (H3b), CE values (4b), CE attitude (5b) and CE behaviour (6b) strengthen the positive effect of corporate radical eco-innovation on perceived corporate intrinsic motivation. However, the model shows that there are no significant interaction effects. Therefore, all four hypotheses are not supported.
5. DISCUSSION
In this chapter, the results of the regression and moderation analyses are discussed and possible explanations are presented. First, the theoretical foundations of this research are summarised and the hypotheses are discussed. Second, limitations of the study and directions for future research are presented. Third, the contributions of this study to existing literature are considered. Finally, the practical implications are offered.
5.1 THEORETICAL FOUNDATIONS
This research examined the effects of corporate incremental and radical eco-innovation on consumers’ perception of the motivation that companies have for engaging in eco-innovation. While incremental and radical innovation are concepts that have been studied by many
researchers throughout the years (Dewar, Dutton, 1986; Hockerts, Wüstenhagen, 2010; Menguc et al., 2014), the topic has most often been studied from the point of view of companies. To our knowledge, no research has examined the perspective of consumers on corporate sustainable innovation. On the basis of the literature described in this research, it was expected that corporate incremental eco-innovation had a positive relationship with perceived corporate extrinsic motivations and that corporate radical eco-innovation had a positive relationship with perceived corporate intrinsic motivation. The hierarchical multiple regression analyses suggested that only hypotheses 3a is supported. This hypothesis states that the relationship between corporate incremental eco-innovation and perceived corporate extrinsic motivations is strengthened by high consumer environmental knowledge. The rest of the stated hypotheses did not prove to be significant in this research. At least the following three explanations can be provided for these findings.
Firstly, consumers might have high general factual knowledge about the current issues of the natural environment, its major ecosystems, and the fact that change in systems can help prevent pollution, but they do not seem to specifically possess knowledge about the different types of innovation revolved around solving environmental issues. In other words, consumers can be knowledgeable about the environment and its current issues, but this knowledge does not seem to be extensive. Consumers therefore might not be able to observe subtle differences between different forms of innovation based on companies’ characteristics, but they may determine the presence of some form of innovation in a company due to the introduction of new sustainable products (Afuah, 1998). These new products signal to a consumer that a company is tapping into a new market. However, these signals can reduce the clarity of the company’s market position and call into question the company’s motives (Becker-Olsen et al., 2006). This lack of consistency between prior expectations and new information about the incumbent can act as a trigger for skepticism and the formation of negative beliefs about the