Business innovation and waste management sustainability: the case of door-to-door collection
DOI:
https://doi.org/10.7433/s98.2015.21Keywords:
waste management, sustainability, triple-bottom-line paradigm, profitabilityAbstract
Purpose of the paper: The paper analyses the relationship between innovative kerbside recycling programs and the costs and profits of firms entrusted with waste collection. In particular, the paper disaggregates the effects of implementing and operating the green collection scheme and especially the increasingly popular door-to-door system.
Methodology: It uses a panel of around 70 Italian firms specialized in waste management to estimate a short-run cost-profit function system, where recycling rates depend on the adopted collection schemes. The empirical model is framed within the triple-bottom-line paradigm, based on interconnections between environmental, economic and social sustainability.
Findings: Results show that costs increase following the implementation of environmentally friendly programs while they decrease when recycling rates increase, possibly due to savings from the disposal side. Notable increases in profit level emerge just after the implementation of greener collection techniques as a result of enhanced mark-ups. The interpretation of this effect invokes a process of social legitimacy of the firms as theorized in the context of the institutional theory.
Research limits: The paper might be improved by considering a more detailed analysis of the issue of vertical integration, concerning in particular the direct management of incinerators and landfills.
Practical implications: The paper contributes to understanding the balance between costs and profitability when advanced recycling programs are put in place, especially for budget-constrained municipalities.
Originality of the paper: The paper analyses and provides interpretation to the unexplored nexus between recycling programs and firm profits.
References
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LOZANO-VIVAS A. (1997), “Profit efficiency for Spanish savings banks”, European Journal of Operations Research, vol. 98, n. 2, pp. 381-394.
LUND J. (1990), “Least-cost scheduling of solid waste recycling”, Journal of Environmental Engineering, vol. 116, n. 1, pp. 182-197.
OLIVER C. (1991), “Strategic responses to institutional processes”, Academy of Management Review, vol. 16, n. 1, pp. 145-179.
OLIVER C. (1997), “Sustainable competitive advantage: combining institutional and resource-based views”, Strategic Management Journal, vol. 18, n. 9, pp. 697-713.
READY M.J., READY R.C. (1995), “Optimal Pricing of Depletable, Replaceable Resources: The Case of Landfill Tipping Fees”, Journal of Environmental Economics and Management, vol. 28, n. 3, pp. 307-323.
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SONPAR K., PAZZAGLIA F., KORNIJENKO J. (2010), “The paradox and constraints of legitimacy”, Journal of Business Ethics, vol. 95, n. 1, pp. 1-21.
STEVENS B.J. (1978), “Scale, market structure, and the cost of refuse collection”, Review of Economics and Statistics, vol. 60, n. 3, pp. 438-448.
SUCHMAN M.C. (1995), “Managing legitimacy: strategic and institutional approaches”, Academy of Management Review, vol. 20, n. 3, pp. 571-610.
TANSKANEN J.H., KAILA J. (2001), “Comparison of methods used in the collection of source separated household waste”, Waste Management and Research, vol. 19, n. 6, pp. 486-497.
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UTILITATIS (2014), Green Book. Aspetti economici della gestione dei rifiuti in Italia, Rapporto Utilitatis pro acqua, energia e ambiente - Federambiente, Roma.
WOODARD R., BENCH M., HARDER M.K. (2005), “The development of a UK kerbside scheme using known practice”, Journal of Environmental Management, vol. 75, n. 2, pp. 115-127.
ZELLNER A. (1962), “An efficient method of estimating seemingly unrelated regressions and tests for aggregation bias”, Journal of the American Statistical Association, vol. 57, n. 298, pp. 348-368.
AKHAVEIN J.D., BERGER A.N., HUMPHREY D.B. (1997), “The effects of megamergers on efficiency and prices: evidence from a bank profit function”, Review of Industrial Organization, vol. 12, n. 1, pp. 95-139.
AMBEC S., LANOIE P. (2008), “Does it pay to be green? A systematic overview”, Academy of Management Perspectives, vol. 22, n. 4, pp. 45-62.
ANTONIOLI B., FILIPPINI M. (2002), “Optimal size in the waste collection sector”, Review of Industrial Organization, vol. 20, pp. 239-252.
BACCARANI C. (1991), “Qualità e governo dell’impresa”, Quaderni di Sinergie, n. 7, pp. 37-56.
BERGER A.N. MESTER L.J. (2000),“Inside the black box: What explains differences in the efficiencies of financial institutions?”, in Harker P.T., Zenios S.A. (eds), Performance of Financial Institutions Efficiency, Innovation, Regulation, Cambridge University Press, Cambridge, UK.
CALLAN S.J., THOMAS J.M. (2001), “Economies of scale and scope: a cost analysis of municipal solid waste services”, Land Economics, vol. 77, n. 4, pp. 548-560.
CASU B., GIRARDONE C. (2004), “Large banks' efficiency in the single European market”, The Service Industries Journal, vol. 24, n. 6, pp. 129-142.
CHOU R., HASAN I., LOZANO-VIVAS A., SHEN C.H. (1999),“Deregulation and efficiency of Taiwanese banks”, in Fu T.T., Huang C.J., Knox Lovell C.A., Economic Efficiency and Productivity Growth in the Asia-Pacific Region, Edward Elgar Publishing, Cheltenham, UK.
COFFMAN M., UMEMOTO K. (2010), “The triple-bottom-line: framing of trade-offs in sustainability planning practice”, Environment, Development and Sustainability, vol. 12, pp. 597-610.
DE YOUNG R., HASAN I. (1998), “The performance of de novo commercial banks: a profit efficiency approach”, Journal of Banking and Finance, vol. 22, n. 5, pp. 565-587.
DIXON-FOWLER H.R., SLATER D.J., JOHNSON J.L., ELLSTRAND A.E., ROMI A.M. (2013), “Beyond “Does it pay to be green”. A meta-analysis of moderators of the CEP-CFP relationship”, Journal of Business Ethics, vol. 112, n. 2, pp. 353-366.
DUBIN J.A., NAVARRO P. (1988), “How market for impure public goods organize: the case of household refuse collection”, Journal of Law, Economics and Organization, vol. 4, n. 2, pp. 217-241.
ELKINGTON J. (1998), Cannibals with forks: the triple bottom line of 21st century business, Capston Publishing, Oxford.
GREEN W.H. (2012), Econometric Analysis. 7th Edition, Prentice Hall, Upper Saddle River, NJ.
HART S.L. (1995), “A natural-resource-based view of the firm”, The Academy of Management Review, vol. 20, n. 4, pp. 986-1014.
HIGHFILL J., McASEY M. (1997), “Municipal waste management: recycling and landfill space constraints”, Journal of Urban Economics, vol. 41, n. 1, pp. 118-136.
HUHTALA A. (1997), “A Post-Consumer Waste Management Model for Determining Optimal Levels of Recycling and Landfilling”, Environmental and Resource Economics, vol. 10, pp. 301-314.
HUMPHREY D.B., PULLEY L.B. (1997), “Banks’ responses to deregulation: profits, technology, and efficiency”, Journal of Money, Credit and Banking, vol. 29, n. 1, pp. 73-93.
ISPRA (2013), Rapporto rifiuti urbani, Rapporto Istituto Superiore per la Protezione e la Ricerca Ambientale, Roma.
JACOBS T., EVERETT J. (1992), “Optimal Scheduling of Consecutive Landfill Operations with Recycling”, Journal of Environmental Engineering, vol. 118, n. 3, pp. 420-429.
JENKINS R.R., MARTINEZ S.A., PALMER K., PODOLSKY M.J. (2003), “The determinants of household recycling: a material-specific analysis of recycling program features and unit pricing”, Journal of Environmental Economics and Management, vol. 45, n. 2, pp. 294-318.
KASMAN A., YILDIRIM C. (2006), “Cost and profit efficiencies in transition banking: the case of new EU members”, Applied Economics, vol. 38, n. 9, pp. 1079-1090.
KHUMBHAKAR S.C. (2006), “Specification and estimation of nonstandard profit functions”, Empirical Economics, vol. 31, n. 1 pp. 243-260.
LARSEN A.W., MERRILD H., MØLLER J., CHRISTENSEN T.H. (2010), “Waste collection systems for recyclables: An environmental and economic assessment for the municipality of Aarhus (Denmark)”, Waste Management, vol. 30, n. 5, pp. 744-754.
LAVEE D. (2007), “Is municipal solid waste recycling economically efficient?”, Environmental Management, vol. 40, n. 6, pp. 926-943.
LOZANO-VIVAS A. (1997), “Profit efficiency for Spanish savings banks”, European Journal of Operations Research, vol. 98, n. 2, pp. 381-394.
LUND J. (1990), “Least-cost scheduling of solid waste recycling”, Journal of Environmental Engineering, vol. 116, n. 1, pp. 182-197.
OLIVER C. (1991), “Strategic responses to institutional processes”, Academy of Management Review, vol. 16, n. 1, pp. 145-179.
OLIVER C. (1997), “Sustainable competitive advantage: combining institutional and resource-based views”, Strategic Management Journal, vol. 18, n. 9, pp. 697-713.
READY M.J., READY R.C. (1995), “Optimal Pricing of Depletable, Replaceable Resources: The Case of Landfill Tipping Fees”, Journal of Environmental Economics and Management, vol. 28, n. 3, pp. 307-323.
SIANO A. (2012), “La comunicazione per la sostenibilità nel management delle imprese”, Sinergie, n. 89, pp. 3-23.
SONPAR K., PAZZAGLIA F., KORNIJENKO J. (2010), “The paradox and constraints of legitimacy”, Journal of Business Ethics, vol. 95, n. 1, pp. 1-21.
STEVENS B.J. (1978), “Scale, market structure, and the cost of refuse collection”, Review of Economics and Statistics, vol. 60, n. 3, pp. 438-448.
SUCHMAN M.C. (1995), “Managing legitimacy: strategic and institutional approaches”, Academy of Management Review, vol. 20, n. 3, pp. 571-610.
TANSKANEN J.H., KAILA J. (2001), “Comparison of methods used in the collection of source separated household waste”, Waste Management and Research, vol. 19, n. 6, pp. 486-497.
TICKNER G., McDAVID J.C. (1986), “Effects of scale and market structure on the costs of residential solid waste collection in Canadian cities”, Public Finance Quarterly, vol. 14, n. 4, pp. 371-393.
UTILITATIS (2014), Green Book. Aspetti economici della gestione dei rifiuti in Italia, Rapporto Utilitatis pro acqua, energia e ambiente - Federambiente, Roma.
WOODARD R., BENCH M., HARDER M.K. (2005), “The development of a UK kerbside scheme using known practice”, Journal of Environmental Management, vol. 75, n. 2, pp. 115-127.
ZELLNER A. (1962), “An efficient method of estimating seemingly unrelated regressions and tests for aggregation bias”, Journal of the American Statistical Association, vol. 57, n. 298, pp. 348-368.
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2015-12-30
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