The Effect of Corporate Environmental Initiatives on Firm Value: Evidence from Fortune 500 Firms

Wassmer, Ulrich; Cueto, Diego C.; Switzer, Lorne N.

doi:10.3917/mana.171.0001

Cited by 6 publications

(8 citation statements)

References 30 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Prior studies (e.g., MacKinlay, 1997;McWilliams and Siegel, 1997) suggest calculating the cumulative abnormal returns (CARs) around the event dates (i.e., over an event window) in order to capture the full impact of the event. Following prior event studies (e.g., Ba et al, 2013;Wassmer et al, 2014), we choose three trading days around the event dates (i.e., day -1 to +1) as the event window to account for possible information leakages before the event and possible announcements made after stock market closures. Our final sample for the event study reduces from 656 to 556 as the stock return data of some firms are not available in the 200-day estimation period or the three-day event window.…”

Section: Event Study Methodologymentioning

confidence: 99%

See 1 more Smart Citation

Corporate environmental initiatives in the Chinese context: Performance implications and contextual factors

Lam

Yeung

Cheng

et al. 2016

International Journal of Production Economics

View full text Add to dashboard Cite

Although a number of studies have been conducted on the relationship between environmental management and firm performance, most of them are conducted in the Western context. Due to the unique social and economic environments in China, the performance implications of environmental management might be quite different in the Chinese context. We examine the impact of corporate environmental initiatives (CEIs) on the market value of firms in China. We find that, in contrast to the findings in the Western context, Chinese investors react negatively to CEI announcements. The negative reaction is more significant when the announcements are related to processes rather than products, and for state-owned enterprises rather than privately-owned corporations. However, there is no difference whether the CEI is self-declared or third-party endorsed. Overall, our research indicates that Chinese investors consider CEIs to be in conflict with shareholder interest. In particular, CEIs in state-owned enterprises might be considered by investors as signals that firms need to sacrifice profits to shoulder more social responsibility.

show abstract

Section: Event Study Methodologymentioning

confidence: 99%

“…The links between CEIs and financial performance have been well studied in the Western context (e.g., Gilley et al, 2000;Jacobs et al, 2010;Klassen and McLaughlin, 1996;Wassmer et al, 2014).…”

Section: Ceis and Their Impacts On Financial Performancementioning

confidence: 99%

Corporate environmental initiatives in the Chinese context: Performance implications and contextual factors

Lam

Yeung

Cheng

et al. 2016

International Journal of Production Economics

View full text Add to dashboard Cite

show abstract

“…Guidry and Patten (2010) found, for instance, that the more firms conform to disclosure standards suggested by the GRI, the more they experience a positive market reaction following the release of their sustainability reports. Similarly, abnormal stock market returns have been observed following firm disclosure of sustainability initiatives targeting a positive impact on the environment (Wassmer et al, 2014).…”

Section: Conformity Mechanism: the Impact Of Sustainability Disclosurmentioning

confidence: 98%

“…Firms only realize the full benefits of their social and environmental efforts when these are externally communicated to key stakeholders (Hawn & Ioannou, 2016) and when firms provide detailed reports and hard indicators of their good environmental performance (Plumlee, Brown, Hayes, & Marshall, 2015). After receiving signals such as announcements of environmental or social engagements by the firm, stakeholders re-evaluate companies (Wassmer, Cueto, & Switzer, 2014).…”

Section: Signaling Theory Sustainability Disclosure and Revelation mentioning

confidence: 99%

“You Cannot Hide Forever Luke”: Understanding the Strategic Use of Sustainability Disclosure in the Short and Long Term

Kozan

2020

mgmt

View full text Add to dashboard Cite

This study investigates the relationships among firms’ sustainability disclosure, sustainability performance, and financial performance. Based on legitimacy theory and signaling theory, it argues that sustainability disclosure participates in two distinct mechanisms: a conformity mechanism through which disclosure shows conformity to the norms and a revelation mechanism through which disclosure reveals or hides a firm’s achieved degree of sustainability. In an attempt to contrast and reconcile the two mechanisms, the study assesses their impact on financial performance in the short and long term. Hypotheses are tested using longitudinal data (2002–2010), which cover 10,814 observations of firms from major indexes of stock exchanges worldwide. The results show that the conformity mechanism is effective in both the short and long terms, whereas the revelation mechanism is only effective in the short term. As a consequence, firms with poor sustainability performance may hide their detrimental impact and achieve higher financial performance in the short term by limiting their disclosure but not in the long term in which their lack of conformity is punished. In the long term, only conformity to the norms of disclosure leads to higher financial performance, even in the case of poor sustainability results.

show abstract

“…Environmental friendliness management can improve environmental performance, and it shall be a solution for agency conflict (de Villiers et al, 2011). Improving environmental performance can be potentially increasing firm performance (Al-Tuwaijri et al, 2004;Iqbal et al, 2013;Wassmer et al, 2014;Muhammad et al, 2015).…”

Section: Introductionmentioning

confidence: 99%

Strategy to Improve Firm Performance Through Operational Efficiency Commitment to Environmental Friendliness: Evidence From Indonesia

Utomo

Wahyudi

Muharam

et al. 2018

Organizations and Markets in Emerging Economies

View full text Add to dashboard Cite

The objective of this study is to examine the effect of controlling shareholders’ monitoring on firm performance through the implementation of operational efficiency commitment to environmental friendliness. Non-financial firms listed on the Indonesia Stock Exchange and joining the Environmental Performance Assessment Program (PROPER) are determined as the sample. Results indicate that controlling shareholders have a positive impact on operational efficiency commitment to environmental friendliness and also on firm performance. In addition, other key findings indicate that the controlling shareholders can improve firm performance through the implementation of operational efficiency commitment to environmental friendliness. The results of this study support the position of the agency theory, the stakeholder theory, and the legitimacy theory. Operational efficiency commitment to environmental friendliness is then suggested to be a meaningful strategy for the firms to obtain sustainable performance.

show abstract

The Effect of Corporate Environmental Initiatives on Firm Value: Evidence from Fortune 500 Firms

Cited by 6 publications

References 30 publications

Corporate environmental initiatives in the Chinese context: Performance implications and contextual factors

Corporate environmental initiatives in the Chinese context: Performance implications and contextual factors

“You Cannot Hide Forever Luke”: Understanding the Strategic Use of Sustainability Disclosure in the Short and Long Term

Strategy to Improve Firm Performance Through Operational Efficiency Commitment to Environmental Friendliness: Evidence From Indonesia

Contact Info

Product

Resources

About