Abstract
This paper examines whether publicity (either good or bad) about environmental performance affects companies’ share prices. To date, a lot of the research in this area has been conducted in a US setting and has arrived at inconclusive results. This investigation examines the topic in a UK context. Specifically, it looks at publicity about fines for environmental pollution as well as commendations about good environmental achievements to see whether such information influences share prices. The results indicate that there is a stock market response to such news especially for details on fines—typically up to 1 week after news is published. A cross-sectional analysis indicates that the share price response is mainly a function of the relative fine imposed on the firm; other explanatory variables such as environmental performance news or sector membership were unsuccessful in explaining variations in the market responses.
| Original language | English |
|---|---|
| Pages (from-to) | 7-26 |
| Number of pages | 20 |
| Journal | Accounting Forum |
| Volume | 28 |
| Issue number | 1 |
| DOIs | |
| Publication status | Published - Mar 2004 |
Keywords
- Stock markets
- Share prices
- Environment Agency
