Stock market response to environmental policies: Evidence from heavily polluting firms in China

Guo, Mengmeng; Kuai, Yicheng; Liu, Xiaoyan

doi:10.1016/j.econmod.2019.09.028

Cited by 160 publications

(75 citation statements)

References 33 publications

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“…In addition, in order to comply with environmental regulations, firms also need to change the existing process and production technology, which will bring the risk of reduced production efficiency to the firm [24]. On the other hand, strict local environmental regulations that may affect local firms' Economic benefits will turn away potential investors [25]. These investors may choose to invest in areas with relatively loose environmental regulations.…”

Section: Environmental Regulation and Corporate Environmental Responsibilitymentioning

confidence: 99%

The Relationship between Environmental Regulation, Pollution and Corporate Environmental Responsibility

Wang

Liao

2021

IJERPH

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The rapid economic development has severely damaged the ecological environment and affected public health. Firms are the main source of pollution; thus, corporate environmental responsibility (CER) has attracted great attention from the government, shareholders and the public. This study used both the fixed effects model and the system GMM (Generalized Method of Moments) model to examine the relationship between environmental pollution, environmental regulations and CER for 30 provinces in China, over the period 2005 to 2015. This study drew the following results: first, mandatory CER disclosure policy can significantly decrease environmental pollution. Second, an inverted U-shaped relationship exists between environmental regulations and environmental pollution. Third, environmental pollution has a positive impact on CER. Fourth, an inverted U-shaped relationship exists between environmental regulations and CER. Therefore, it is necessary to find a balance between environmental regulations affecting environmental pollution and CER so that they can effectively reduce environmental pollution and increase the enthusiasm of firms to carry out environmental responsibility activities.

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Section: Environmental Regulation and Corporate Environmental Responsibilitymentioning

confidence: 99%

The Relationship between Environmental Regulation, Pollution and Corporate Environmental Responsibility

Wang

Liao

2021

IJERPH

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“…More recent studies, however, report that regulation, e.g. rigorous environmental laws, can hinder private investment growth through stronger policy enforcement ( Tiwari, 2012 ; Boadi and Amegbe, 2017 ; Guo et al, 2020 ). The World Bank has expressed concern about the possible counterproductive effects of regulation on the small, informal sector.…”

Section: Literature Reviewmentioning

confidence: 99%

Does corruption matter for stock markets? The role of heterogeneous institutions

2021

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In examining the role of institutions in resisting corruption and its impact on growth, most studies concentrate on the aggregate level and conclude that sound institutions enhance growth. We focus instead on varying dimensions of heterogeneous institutions in the presence of corruption and their interactive effect on stock returns in four emerging economies: Brazil, Russia, India, and China (BRIC). We pay particular attention to democratic accountability, bureaucratic quality, and law and order. Using monthly data for the first time in this literature, we find that corruption and other weaker institutions lower stock returns during the period 1995-2014. However, interaction effects show interesting mixed results: Bureaucratic quality can mitigate the ill effects of corruption and increase returns by reducing red tape, whereas corruption distorts law and order and lowers stock returns. Our findings suggest that policies to enhance bureaucratic efficiency can abate the adverse effects of corruption, but a restrictive law and order environment tends to lower stock returns.

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“…Stock market returns respond to major events. Previous studies have identified several major events that have affected such returns, for example, disasters (Kowalewski & Śpiewanowski, 2020), sports (Buhagiar et al, 2018), news (Li, 2018), and environmental (Guo et al, 2020) and political events (Bash & Alsaifi, 2019;Shanaev & Ghimire, 2019). Stock market returns may also respond to epidemic diseases, for example, Severe Acute Respiratory Syndrome (SARS) outbreak (Chen et al, 2007;Chen et al, 2009), and Ebola Virus Disease (EVD) outbreak (Ichev & Marinč, 2018).…”

Section: Introductionmentioning

confidence: 99%

Death and contagious infectious diseases: Impact of the COVID-19 virus on stock market returns

Al-Awadhi

Alsaifi

Al-Awadhi

et al. 2020

Journal of Behavioral and Experimental Finance

1,123

906

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Stock market response to environmental policies: Evidence from heavily polluting firms in China

Cited by 160 publications

References 33 publications

The Relationship between Environmental Regulation, Pollution and Corporate Environmental Responsibility

The Relationship between Environmental Regulation, Pollution and Corporate Environmental Responsibility

Does corruption matter for stock markets? The role of heterogeneous institutions

Death and contagious infectious diseases: Impact of the COVID-19 virus on stock market returns

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