The DOI matches its Crossref record; 2 of the 2 references it cites were found in a registry or an index.
Does the Market Value Environmental Performance?
Abstract
Previous studies that attempt to relate environmental to financial performance have often led to conflicting results due to small samples and subjective environmental performance criteria. We report on a study that relates the market value of firms in the S&P 500 to objective measures of their environmental performance. After controlling for variables traditionally thought to explain firm-level financial performance, we find that bad environmental performance is negatively correlated with the intangible asset value of firms. The average ‘intangible liability’ for firms in our sample is $380 million—approximately 9% of the replacement value of tangible assets. We conclude that legally emitted toxic chemicals have a significant effect on the intangible asset value of publicly traded companies. A 10% reduction in emissions of toxic chemicals results in a $34 million increase in market value. The magnitude of these effects varies across industries, with larger losses accruing to the traditionally polluting industries.
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Cites
Efficient capital markets: A review of theory and empirical work
Fama, E. F. (1970) · The Journal of Finance · doi:10.2307/2325486 · Cited by 13,635
A Simple Approximation of Tobin's q
Chung, K. H., & Pruitt, S. W. (1994) · Financial Management · doi:10.2307/3665623 · Cited by 2,460
Cited by
Misery Loves Companies: Rethinking Social Initiatives by Business
Margolis, J. D., & Walsh, J. P. (2003) · Administrative Science Quarterly · doi:10.2307/3556659 · Cited by 5,130
Corporate Sustainability: First Evidence on Materiality
Khan, M., Serafeim, G., & Yoon, A. (2016) · The Accounting Review · doi:10.2308/accr-51383 · Cited by 1,959
The Porter Hypothesis at 20: Can Environmental Regulation Enhance Innovation and Competitiveness?
Ambec, S., Cohen, M. A., Elgie, S., & Lanoie, P. (2013) · Review of Environmental Economics and Policy · doi:10.1093/reep/res016 · Cited by 1,928
Self-citationCorporate goodness and shareholder wealth
Krüger, P. (2015) · Journal of Financial Economics · doi:10.1016/j.jfineco.2014.09.008 · Cited by 1,901
The effect of pro-environmental preferences on bond prices: Evidence from green bonds
Zerbib, O. D. (2019) · Journal of Banking & Finance · doi:10.1016/j.jbankfin.2018.10.012 · Cited by 1,379
Metadata
- Authors
- Konar, S., & Cohen, M. A.
- Venue
- Review of Economics and Statistics
- Publisher
- MIT Press - Journals
- Published
- 2001-05
- Volume
- 83
- Issue
- 2
- Pages
- 281-289
- ISSN
- 0034-6535 (ISSN-L)
- 1530-9142
- OpenAlex
- W2083228694
- Cited by
- 1,395
- References
- 2
- FWCI
- 34.38
- Type
- journal article
- Language
- en
- Open access
- closed
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