![Do stock markets penalize environment-unfriendly behaviour? Evidence from India [An article from: Ecological Economics]](https://www.ebooknetworking.net/books/B00/0RR/bigB000RR346I.jpg)
Do stock markets penalize environment-unfriendly behaviour? Evidence from India [An article from: Ecological Economics]
Book Details
Author(s)S. Gupta, B. Goldar
PublisherElsevier
ISBN / ASINB000RR346I
ISBN-13978B000RR3461
AvailabilityAvailable for download now
MarketplaceUnited States 🇺🇸
Description
This digital document is a journal article from Ecological Economics, published by Elsevier in 2005. The article is delivered in HTML format and is available in your Amazon.com Media Library immediately after purchase. You can view it with any web browser.
Description:
A growing body of research points to the fact that capital markets react to environmental news and thus create incentives for pollution control in both developed and emerging market economies. In this paper, we conduct an event study to examine the impact of environmental rating of large pulp and paper, auto, and chlor alkali firms on their stock prices. We find that the market generally penalizes environmentally unfriendly behaviour in that announcement of weak environmental performance by firms leads to negative abnormal returns of up to 30%. A positive correlation is found between abnormal returns to a firm's stock and the level of its environmental performance. These findings should be viewed as further evidence of the important role that capital markets could play in environmental management, particularly in developing countries where environmental monitoring and enforcement are weak.
Description:
A growing body of research points to the fact that capital markets react to environmental news and thus create incentives for pollution control in both developed and emerging market economies. In this paper, we conduct an event study to examine the impact of environmental rating of large pulp and paper, auto, and chlor alkali firms on their stock prices. We find that the market generally penalizes environmentally unfriendly behaviour in that announcement of weak environmental performance by firms leads to negative abnormal returns of up to 30%. A positive correlation is found between abnormal returns to a firm's stock and the level of its environmental performance. These findings should be viewed as further evidence of the important role that capital markets could play in environmental management, particularly in developing countries where environmental monitoring and enforcement are weak.
