View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by ScholarBank@NUS TOWARDS SUSTAINABLE PROPERTY INVESTMENT: PERSPECTIVE FROM ASIAN EMERGING MARKETS LI ZHILIANG NATIONAL UNIVERSITY OF SINGAPORE 2013 TOWARDS SUSTAINABLE PROPERTY INVESTMENT: PERSPECTIVE FROM ASIAN EMERGING MARKETS LI ZHILIANG (BSc, SDJZU; MSc, Real Estate Finance, KTH) A THESIS SUBMITTED FOR THE DEGREE OF DOCTOR OF PHILOSOPHY DEPARTMENT OF REAL ESTATE NATIONAL UNIVERSITY OF SINGAPORE 2013 DECLARATION I hereby declare that this thesis is my original work and it has been written by me in its entirety. I have duly acknowledged all the sources of information which have been used in the thesis. This thesis has also not been submitted for any degree in any university previously. Candidate Name: LI ZHILIANG Date: 26th September 2013 ACKNOWLEDGEMENT I am deeply indebted to my thesis supervisor, Prof Deng Yongheng for his persistent guidance, patience and support throughout my PhD study. Prof Deng is a well-established real estate economist and econometrician. Since the beginning, I have been trained to come up with a research question and frame the research topic independently. It‘s Prof Deng who inspires me on the topic of Asian sustainable property investment after working on the Singapore green building economics project, and backs me at various occasions. I am thankful for Prof John, M, Quigley, whose passing last year is a great loss to real estate academia. He is not only a distinguished scholar, but also a good friend and mentor. I was honored to have worked with him on the Singapore green building project, and impressed by his broad and profound knowledge and rigorous attitudes towards research. I deeply mourn him, and hope my work could live up to his expectation. I also thank Prof Nils Kok for his inspiration on the research topic. Besides, I am grateful to Prof Tu Yong, Prof Ong Seow Eng, Prof Sing Tien Foo, Prof Yu Shiming, Prof Seah Kiat Ying, Prof Ooi Thian Leong, Joseph, Prof Fu Yuming, Prof Lee Naijia, and Prof Liao Wenchi, for their dedications to my coursework teaching and valuable comments on my thesis. Meanwhile, I benefit a lot from discussions with my classmates and friends, e.g., Yuan Xu, Zhang Huiming, Wu Jing, Li Pei, Radheshyam Chamarajanagara Gopinath , Jiang Yuxi, and Omokolade Ayodeji Akinsomi. Also, I thank Zainab, Ko Chen, Li Congmiao, Kevin, and Zheng Huiming for their administrative and logistic support. Last but not the least, I thank my parents, parents-in-law, and friends in China, Singapore, and Sweden, who support and encourage me to pursue the PhD degree along the way. In particular, I would never thank enough for my wife – Sun Xiaocong (孙小丛), who has accompanied with me over the past decade. Any achievement I‘ve got so far, if any, is not possible without her. Thus, this thesis is largely dedicated to her! I TABLE OF CONTENTS Acknowledgement ............................................................................................................................................................ I Summary ......................................................................................................................................................................... V List of Tables ................................................................................................................................................................ VII List of Figures ............................................................................................................................................................... VII Chapter One: Introduction ............................................................................................................................................ 1 1.1Social Responsibility .............................................................................................................................................. 1 1.2 Sustainable Property Investment ............................................................................................................................. 2 1.3 Research Background ............................................................................................................................................. 3 1.4 State of The Art ....................................................................................................................................................... 5 1.5 Research Statement & Contribution ....................................................................................................................... 6 1.6 Organization of the Thesis ...................................................................................................................................... 9 Chapter Two: The Greening of Asian Real Estate Industry ..................................................................................... 11 Abstract ....................................................................................................................................................................... 11 2.1 Introduction ........................................................................................................................................................... 12 2.2 Literature Review on CSR .................................................................................................................................. 15 2.2.1 Opponents for CSR ........................................................................................................................................ 15 2.2.2 Proponents for CSR ....................................................................................................................................... 16 2.2.3 Capital Market Response to CSR .................................................................................................................. 17 2.3 Institutional Difference in Asia ........................................................................................................................... 18 2.3.1 Green Certification System ............................................................................................................................ 19 2.3.2 Regulatory Instrument ................................................................................................................................... 20 2.3.3 Economic Instrument ..................................................................................................................................... 21 2.4 Data Collection & Analysis ................................................................................................................................ 22 2.4.1 Environmental Data ....................................................................................................................................... 22 2.4.2 Dependent Variable ....................................................................................................................................... 25 2.4.3 Independent Variable ..................................................................................................................................... 26 2.4.4 Descriptive Statistics ...................................................................................................................................... 27 2.5 Empirical Analysis .............................................................................................................................................. 28 2.5.1 Prior Empirical Studies on CSR-CFP Debate ................................................................................................ 28 2.5.2 Model Specification ....................................................................................................................................... 30 2.5.3 Empirical Results ........................................................................................................................................... 32 II 2.5.4 Robustness Test ............................................................................................................................................. 32 2.6 Conclusion & Future Research ........................................................................................................................... 33 Chapter Three: Does It Pay To Go Green? Evidence from Singapore Housing Market ....................................... 40 Abstract ....................................................................................................................................................................... 40 3.1 Introduction ........................................................................................................................................................... 41 3.2 Literatures on Green Building Economics .......................................................................................................... 43 3.3 The Singapore Green Mark Program & Certification ......................................................................................... 45 3.3.1 Application and Assessment Process ............................................................................................................. 46 3.3.2 The Rating System ......................................................................................................................................... 47 3.4 Data Collection & Description ...........................................................................................................................