Market value of sustainability business innovations in the construction sector

The possible connection between sustainability innovations and the market capitalization of construction sector companies is examined. This is the first known study to test statistically the connection between sustainability innovations and the market value of companies in the construction sector. An event study model is used to analyse sustainability innovation announcements and financial information of large construction sector companies in a number of countries. The main finding of the analysis is that a positive and statistically significant association exists between sustainability innovation announcements and the market value of companies in the construction sector. According to the results, sustainability innovation announcements explain an increase of 0.82% in the market capitalization of the studied companies. The findings are in line with earlier studies suggesting that investments of construction sector companies in sustainability can lead to the creation of economic value. The results imply that sustainability innovations are relevant to the top management of companies operating in the construction sector regarding business development. In addition, information on sustainability innovations can be useful to stock market investors for assessing the future growth potential of construction companies.