My Doctoral research in Economics investigates the expected market allocation from the substitution of petrochemical plastics by bio-based plastics composites. The production of e.g. Wood-Plastic Composites (WPC) can be seen as abatement technology which reduces the use of crude oil by adding up to 80% wood dust and/or plant fibres to the compound. If employed in packaging or other product components which usually are made from petrochemical plastics then negative impacts on the environment become reduced. Also social damage costs are expected to go down with positive effect on consumer rent. 

In my research I apply methods like conjoint analysis, meta-analysis, multi-criteria decision making (MCDM), economic impact analysis, descriptive policy analysis and market simulation by modelling to find out if and how social welfare, producer profit and consumer demand change under the application of economic policies. Such exogenous impacts on the market are meant to be eco-labelling of WPC, eco-tax on fossil-based plastics, early standardization of WPC and spill-over effects thereof and particular marketing of bio-based plastics-composites. Results from my research also play a role in my current activities in the European Standardization Committee for Wood-Plastic Composites. 

All research about economic impacts from plastics substitution demands realistic assumptions about materials and their technical performance over the expected lifetime depending on the application of the plastics in products. In economics mostly partial models are applied because a complete picture about all potential effects on the economy is hardly possible to draw. Here, my previous Doctoral studies in Engineering about WPC-durability and structural performance come into play. Since findings allow for an overall assessment of such bio-based composites in practice, the economic drafted models become far more realistic and tend to develop towards total models.  

In what follows are my single research projects in economics in chronological order starting in 2014. Worthwhile to mention that before researching I was working 6 years as Product Manager at two market leaders where I regularly conducted innovation- and market-related analysis as well as product and market development.  

Discipline:

Business Administration / Innovation Management

Hypothesis:  

The medium sized bio-industry can effectively apply a matrix-based ideation model in innovation management even if no in-house R&D is available

Method:

Matrix-based assessment and interpretation of empiric data about research projects from data bases.

Findings:  

Development of a decision-making instrument and application to bio-based plastics composites (WPC). Therefrom the next generation of innovative WPC-based products as green-composites became revealed.

Progress: 

Mitigate innovation bottlenecks in the bio-based industry through effective planning tools and reduce current market entry barriers for small and medium-sized enterprises.

Dissemination:  

1. D.Friedrich, Supporting the development process for building products by the use of research portfolio analysis: A case study for wood plastics composite materials. Case Studies in Construction Materials 4 (2016) 49–54. 

2. Presentation at the 10th Conference on Advanced Building Skins, 3-4 Nov. 2015, Bern, Switzerland.

3. Working Paper No1: Bio-based Materials – Current State of the Art.

4. Working Paper No2: State of research on bio-based plastics composites (WPC).

Next steps:

Identification of techno-economic performance criteria for internalization effects from WPCs.

Discipline:   

Business Administration / Innovation Management.

Hypothesis:  

The gap in technical performance between green and brown plastics-based products is quantifiable by the development and application of an MCDM-approach.  

Method: 

Meta-Analysis in combination with Multi-Criteria Decision Making was applied to identify decisive product criteria from the viewpoint of main decision makers in the bio- and building industry. The selected characteristics were assessed against each other by a specific weighing method derived from empiric data about published product approval documents. Those criteria which make more than 50% of product decision were derived and set as benchmark criteria for upcoming WPC product developments.   

Findings:  

Mechanical and durability-related material properties make more than 50% of decision. Environmental aspects play a sub-ordinate role. Future WPC products must at first comply with current technical properties and additionally provide sustainability on top when competing against conventional building materials.    

Progress: 

The subjective buying decision of specifiers in the building industry is mainly influenced by technical performance criteria. Hence, WPCs must be comparable in terms of mechanical strength. Further, durability-related aspects compensate less equally for structural deficits and therefore a coefficient of substitution should be greater than 1.0.   

Dissemination:  

1. D.Friedrich, Assessment of standard compliance of Central European plastics-based wall cladding using multi-criteria decision making (MCDM), Case Studies in Structural Engineering 5 (2016), 27-37. 

2. Working Paper No3: State of the art in standardization of WPC in the building envelope.

Next steps:

Equivalence of WPC`s mechanical and durability-related performance criteria to conventional plastics-products in the building scope must become quantified.

Discipline: 

Economics / Microeconomics

Hypothesis:  

The introduction of an eco-label for WPC is welfare enhancing and reduces social damage costs of the society.

Method: 

Meta-analysis and subsequent economic impact analysis also with regard to alternative economic policy instruments like Pigou tax and governmental market control.

Findings:  

Internalisation of social damage costs caused by crude-oil consuming plastics with the use of eco-labels for bio-based plastics composites is demand-inducing and social welfare-enhancing. In contrasts, completely substituting any petrochemical plastics by bio-based plastics composites is again welfare reducing. The social optimal degree of substitution is estimated by 25% to 50%. 

Progress: 

Findings are relevant for the current work of the author in the CEN TC 249 WG13 „WPC“.

Dissemination: 

1. D.Friedrich, Welfare effects from eco-labeled crude oil preserving wood-polymer composites: A comprehensive literature review and case study, Journal of Cleaner Production 188 (2018) 625-637. 

2. Presentation at the Plastics Regulations Congress 2018, 14-15 March 2018, Cologne, Germany. 

Next steps: 

Normative analysis on further internalizing policies like early standardization of bio-based plastics composites.

Discipline: 

Economics / Microeconomics.

Hypothesis:  

The standardization of bio-based plastics composites is at the crossroad to be further advanced or postponed for remaining the flexibility in the bio-industry. Early standardization will force incumbent firms to enlarge their quality and innovations improvements whereas newcomers in the markets will use spill-over effects from the standardizations work. 

Method: 

Comprehensive literature research, model building of market allocation under duopoly with first-mover advantage of incumbent and under principles of the North-South trade model (Columbia University), normative analysis of market allocation and assessment of social welfare.

Findings:  

Early standardization is a motor for further development of bio-based plastics composites products mainly under applied differentiation instruments in order to ease competition in the market and maintain producer profits. Demand for bio-products is expected to increase (similar effect from eco-labeling). Average greenness in the market will increase but become prevented from exorbitant dimensions because cost-efficiency is limiting factor for newcomer companies. 

Progress: 

The current revision of the EN 15534-5 WPC norm under the mandate of CEN TC249 WG13 (WPC) should be executed in due time which will promote further developments in the field of WPC building products, such as cladding (Doctoral research in Engineering).

Dissemination: 

1. D.Friedrich, Normative market regulation by means of early standardization: A descriptive policy analysis of the bio-based industry, Journal of Cleaner Production (2019, https://doi.org/10.1016/j.jclepro.2019.05.362.

2. Presentation at the International Conference on Wood-Plastic Composites 2018, 14-15 March 2018, Cologne, Germany.

Next steps: 

Investigations on a market demand function for particular WPC products derived by conjoint analysis and evaluation of market allocation.

Discipline: 

Economics / Microeconomics.

Hypothesis:  

WTP measurement for biobased composites has so far been used in conjunction with commodities. But how much is the WTP and how high is the marginal substitution rate between the dichotomous variables performance and sustainability for greened composites? It is hypothesized that a potential change of less eco-friendly packaging materials towards bio-based plastics composites (WPC) is welfare-enhancing

Method:

A conjoint-based approach reveals the consumer readiness-to-pay for a WPC-based packaging of a low-price consumer goods and a higher priced shopping good. Results are assessed in the light of substitute materials, such as aluminium, paper/wood and pure plastics. From the empiric data the price-demand market function is set up and from the findings a welfare analysis is carried out. This reveals the market effect from a potential change of less environmentally friendly packaging towards bio-based plastics. 

Findings:  

WTP of consumers is higher for WPC-based packaged goods compared to products with conventional materials. Also it was found, that prices can be disproportionally higher for WPC to be used in shopping goods. The readiness-to-pay more for eco-materials in packaging is significantly more pronounced if this new material in applied in higher valued shopping goods.  

Progress: 

The findings confirm that if pure plastics packaging becomes prohibited or taxed in order to regulate for social damage costs (=internalization) then WPC is an accepted and valued substitute to the market with potential to even increase demand and enhance social welfare. 

Dissemination:

1. D.Friedrich, Consumer behaviour towards Wood-Polymer packaging in convenience and shopping goods: A comparative analysis to conventional materials, Resources, Conservation and Recycling

163 (2020), 105097.

2. D.Friedrich, How WPC as packaging material  is valued by consumers: A survey on convenience and shopping goods. Presentation at the AMI WPC Virtual Summit 2020, 15.-16.09.2020. 

3. D.Friedrich, Success factors of Wood-Plastic Composites (WPC) as sustainable packaging material: a cross-sector expert study, Sustainable Production and Consumption. 

Discipline: 

Economics / Microeconomics.

Hypothesis:  

The introduction of a Pigou-tax and product CO2-labeling has positive effect on social welfare and internalization of environmental damage arizing from plastics consumption.

Method:

A questionnaire-based approach was applied where experts from over 40 companies in the German retail industry were asked about their strategic approach after the implementation of a Pigou-tax and labeling for plastics products.  

Findings:  

There is a difference between SMEs and huge companies and also between the food branch and technics segment in pricing and product-related startegic decisions.  

Progress: 

The researched regulatory instruments will lead to partwise price increases in the market but also the industry will bear some of the higher costs. Hence, environmental damage is perfectly internalized. 

Dissemination:

1. D.Friedrich, How regulatory measures towards biobased packaging influence the strategic behaviour of the retail industry: A microempirical study, Journal of Cleaner Production, https://doi.org/10.1016/j.jclepro.2020.121128. 

Discipline: 

Economics / Microeconomics.

Hypothesis:  

Using biodegradable plastics form renewable resources is differently approached between industry-branches. Although the retail industry mostly covers apparel, food and technics products altogether in their portfolio, there is no common solution how to become more sustainable in the use of materials. Clothing is a huge problem meanwhile due to fast fashion and microplastics-pollution in the environment. 

Method:

A questionnaire-based approach was applied to 200 experts in the German retail industry to state their attitude on market- and company-related key-success factors based on pull- and push-principles. A regression analysis will find out which of these most contribute to value-added product development in the field of bioplastics. Descriptive and explorative analysis will reveal strategies and benchmarks between these three most plastics-consuming sectors.   

Findings:  

Under investigation.  

Progress: 

Findings will reveal the most decisive success-factors and whether the fashion-industry should orient on the food- or the technics segment for effective implementation of bioplastics-technology.  

Dissemination:

1. D.Friedrich, Market- and business-related key factors supporting the use of compostable bioplastics in the apparel industry: a cross-sector analysis. Journal of Cleaner Production 297 (2021), 126716. https://doi.org/10.1016/j.jclepro.2021.126716.

2. D.Friedrich, What makes bioplastics innovative for fashion retailers? An in-depth analysis according to the Triple Bottom Line Principle. Journal of Cleaner Production (2021), 128257. https://doi.org/10.1016/j.jclepro.2021.128257.

Discipline: 

Economics / Microeconomics.

Hypothesis:  

The fashion industry is faced a strategy-change towards more sustainable materials in their products. Microplastics in the environment and particularly in the oceans are becoming more and more crucial. A successful approach could be in the use of biodegradable plastics in e.g. sportswear, where so far synthetic yarns are applied. Options for an effective strategy could be cooperation, circular-value-chains and research/innovations. There exist factors which sucessfully impact the success of  retail-industry in using bioplastics. This study aims at revealing these most effective indicators for successful future fashion-strategy and it will quantify their individual contribution to the plastics-change from the viewpoint of the retail apparel-industry.  

Method:

A questionnaire-based approach is applied to experts in the retail industry covering clothing products. 26 items will be evaluated by explorative factor-analysis and the most moderating 3 to 4 factors will be selected for deriving strategy recommendations.     

Findings:  

Under investigation.  

Progress: 

The results will be used for more in-depth analysis via interview-approach with selected experts. Questions about closed-loop-chains and strategic cooperation, also with other branches, are evaluated.   

Dissemination:

1. D.Friedrich, Benefits from sustainable development using bioplastics: A comparison between the food and fashion industries. Sustainable Development (2021), 1-15. https://doi.org/10.1002/sd.2184.

Discipline: 

Economics / Microeconomics.

Hypothesis:  

Wood-Polymer Facades are in the market for serveral years but their potential is rather low. This study tries to find out about the most decisive product properties of such novel facade systems from the perspective of professional deciders in the building scope with strong focus of facade planning and execution work. Further, the willingness-to-pay is measured in order to allow for economic analysis on the most stragically successful marketing strategy of such facade suppliers.   

Method:

A questionnaire-based approach is applied to experts in the building industry covering a choice-based design where willigness-to-pay is measured in dependence of varying utiity bundles. From this a decision tree is derived and turnover maximal analysis is carried out to reveal the most successful utility bundle at highest sales possible.     

Findings:  

Such facade products wich have a technical approval and most possible strenght capacity achieve highest turnover in the market by most deciders. The current sales strategy of such facade suppliers appear less effective i nthis regard.  

Progress: 

The results support a more target group-specific approach and help to make sich biobased bulding product becoming more successfull in the market.  

Dissemination: 

1. D. Friedrich, Attitude of building experts towards novel biobased wood-polymer façades under various properties: a choice-based experiment and impact analysis, Journal of Building Engineering (2020). https://doi.org/10.1016/j.jobe.2020.102079

2. D. Friedrich, Consumer and expert behaviour towards biobased wood-polymer building products: a comparative multi-factorial study according to theory of planned behaviour. Architectural Engineering and Design Management (2021). https://doi.org/10.1080/17452007.2020.1865867.

Discipline: 

Economics / Microeconomics.

Hypothesis:  

Consumers increasingly want more clothing made from sustainable production, materials and reuse.  This study investigates consumer behaviour on several industrial sustainability strategies on petroplastic-based clothing, namely longer wear of clothing, recyclability of plastic clothing or clothing made from bioplastic with potential for composting. The study should reveal whether bioplastic clothing has a high enough consumer acceptance and what the economic impact will be expected.

Method:

Survey-based study with an aution-like character. Derivation of a decision tree and measurement of effect sizes based on socio-demographic variables.

Findings:  

Recyclability dominates, followed by bioplastic and the lowest is the approval for longer use. So slowing down consumption is not an option and petroplastic clothing should be primarily recyclable.  

Progress: 

The textile industry should develop technologies for the recyclability of its petroplastic-based products, retailers should offer take-back systems and the state should set up decentralised collection points for used petroplastic textiles.   

Dissemination:

1. D. Friedrich. Comparative analysis of sustainability measures in the apparel industry: An empirical consumer and market study in Germany. Journal of Environmental Management 289 (2021), 112536. 

2. D. Friedrich. Can Bioplastics Drive the Sustainability Transition in Fashion Like in Other Industries? A Sector Comparison from Consumer Perspective. Materials Circular Economy  4 (2022), 

Discipline: 

Economics / Microeconomics.

Hypothesis:  

By mixing plastic from oil and bioresources, one can conserve fossil fuels. Plastic products made from pure petroleum are therefore harmful, which can initially only be internalised by avoiding them. But mixing with biopolymers allows to restore the old market quantity under pure petroplastic. 

Method:

Mathematical model economic analyses with data from a consumer survey on the willingness to pay for bioplastic products in the textile industry.

Findings:  

The allocatively efficient share of bioplastics in synthetic garments is 79% to 85% under maximum willingness to pay for such biobased textiles compared to pure petroplastic-based clothes.  

Progress: 

The textile industry can produce an efficient market outcome by mixing its synthetic products with bioplastics and at the same time maximally reduce environmental damage from petroplastics under internalisation.    

Dissemination:

1. D. Friedrich. Mixing fossil- and bio-polymers for internalisation of environmental damage: An evidence-based model-theoretical economic analysis. Ecological Economics (2021) 186, 107083. 

2. D. Friedrich. How environmental goals influence consumer willingness-to-pay for a plastic tax: a discrete-choice analytical study. Environment, Development and Sustainability (2021), doi.org/10.1007/s10668-021-01781-7.

3. D. Friedrich, Managing the technology transition towards biopolymers: a cross-sector expert study among German wholesalers, Technology Analysis & Strategic Management. https://doi.org/10.1080/09537325.2021.1985106.

4. D.Friedrich, How building experts evaluate the sustainability and performance of novel bioplastic-based textile façades. Building and Environment (2022) 207(B), 108485.