Stock Market's Reaction to Disclosure of Environmental Violations: Evidence from China [Book Review]
David Bourget (Western Ontario)
David Chalmers (ANU, NYU)
Rafael De Clercq
Jack Alan Reynolds
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Journal of Business Ethics 107 (2):227-237 (2012)
The stock market’s reaction to information disclosure of environmental violation events (EVEs) is investigated multi-dimensionally for Chinese listed companies, including variables such as pollution types, information disclosure sources, information disclosure levels, modernization levels of the region where the company locates, ultimate ownership of the company, and ownership held by the largest shareholder. Using the method of event study, daily abnormal return (AR) and accumulative abnormal return (CAR) are calculated under different event window for examining the extent to which the stock market responds to the EVEs. Furthermore, statistical significance of the difference in stock market reaction is compared between event firms with different characteristics. The relationship between CAR and its impact factors is examined by multivariate analysis. The findings reveal that the average reduction in market value is estimated to be much lower than the estimated changes in market value for similar events in other countries, demonstrating that the negative environmental events of Chinese listed companies currently have weak impact on the stock market
|Keywords||Environmental violation events Information disclosure Stock market Event study Event window|
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References found in this work BETA
Şükrü Özen & Fatma Küskü (2009). Corporate Environmental Citizenship Variation in Developing Countries: An Institutional Framework. [REVIEW] Journal of Business Ethics 89 (2):297 - 313.
Jay J. Janney, Greg Dess & Victor Forlani (2009). Glass Houses? Market Reactions to Firms Joining the Un Global Compact. Journal of Business Ethics 90 (3):407 - 423.
Irene Criado-Jiménez, Manuel Fernández-Chulián, Carlos Larrinage-González & Francisco Javier Husillos-Carqués (2008). Compliance with Mandatory Environmental Reporting in Financial Statements: The Case of Spain (2001–2003). [REVIEW] Journal of Business Ethics 79 (3):245 - 262.
Citations of this work BETA
X. H. Meng, S. X. Zeng, C. M. Tam & X. D. Xu (2013). Whether Top Executives' Turnover Influences Environmental Responsibility: From the Perspective of Environmental Information Disclosure. [REVIEW] Journal of Business Ethics 114 (2):341-353.
X. H. Meng, S. X. Zeng & C. M. Tam (2013). From Voluntarism to Regulation: A Study on Ownership, Economic Performance and Corporate Environmental Information Disclosure in China. [REVIEW] Journal of Business Ethics 116 (1):217-232.
Jan Endrikat (forthcoming). Market Reactions to Corporate Environmental Performance Related Events: A Meta-Analytic Consolidation of the Empirical Evidence. Journal of Business Ethics.
Min Maung, Craig Wilson & Xiaobo Tang (forthcoming). Political Connections and Industrial Pollution: Evidence Based on State Ownership and Environmental Levies in China. Journal of Business Ethics.
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