Green Building Adoption on Office Markets in Europe: An Empirical Investigation into LEED Certification

The goal of the paper is to evaluate the impact of selected factors on the adoption of LEED (Leadership in Energy and Environmental Design) green building certification in Europe. In the empirical part of the paper we track the fraction of LEED-registered office space in selected European cities, and assess the impact of selected socioeconomic and environmental factors on the certification adoption rate. This research contributes to the ongoing debate about the adoption of green buildings in commercial property markets. In this paper, we investigate factors affecting the adoption of LEED certification using the Arellano and Bond generalized method-of-moments estimator. Compared to prior studies, which relied on cross-sectional data, our research uses a panel approach to investigate the changes in green building adoption rates in selected European cities. Among the cities that are quickly adopting LEED are Frankfurt, Warsaw, Stockholm, and Dublin. The adoption process was not equally fast in Brussels and Copenhagen. Using the dynamic panel model approach, we found that the adoption of green building certification is linked to overall innovativeness in the economy and the perceived greenness of the city. Contrary to some previous studies we did not observe links between the size of the office market and the LEED adoption rate.