|
|
|
| Environmental Pollution and Firm Value: Theory and Empirical Evidence |
| TANG Song, SHI Wen, SUN Anqi
|
School of Accountancy, Shanghai University of Finance and Economics;
R&D Department, Shanghai Headquarters, China Central Depository & Clearing Co., Ltd.;
Listed Company Supervision Department I, Shanghai Stock Exchange |
|
|
|
Abstract China's “extensive growth” development model has led to increasingly serious environmental problems and constrained the sustainable development of the economy. The numerous incidents of severe environmental pollution have also had significant negative impacts on society. Accordingly, the environmental issues associated with economic development have been receiving increasing public and government attention. In addition to being important participants in the economy, enterprises are one of the main sources of environmental pollution. Therefore, it is of great practical significance to understand the economic consequences and mechanisms of environmental pollution at the micro-enterprise level. Although numerous studies have examined this issue, so far no consensus has been reached (Cormier et al. 1993; Karpoff et al. 2005). Moreover, many institutions in China, such as those relating to the environmental responsibilities of companies, government supervision, and the enforcement of laws, differ from those in Western countries (Dasgupta et al. 2001). Therefore, it is of significant theoretical and academic value to explore the economic consequences and mechanisms of the environmental pollution in China.
Using a sample of 71 reports of incidents of environmental pollution by listed companies in China from 2005 to 2015, this paper finds that the firm value of listed companies declines significantly after the reports of incidents of environmental pollution are published. Specifically, the market value of the listed companies falls by an average of 1.51% on the day the incidents of environmental pollution are reported. Further analysis also shows that listed companies are more likely to be subject to environmental supervision and government sanction after incidents of environmental pollution are reported, and have greater difficulty obtaining bank debt financing. The changes in the levels of government environmental supervision and debt financing are also significantly related to the cumulative abnormal returns of corporate stocks during the reporting window of pollution incidents. This suggests that investors rationally anticipate the adverse consequences of incidents of environmental pollution and respond negatively to the news. In addition, the increased government supervision after the reporting of pollution incidents is more evident in areas with high needs for public environmental protection, and after the tightening of the government environmental protection policies in 2010. Moreover, the reduction in debt financing is more likely to occur after the tightening of the government environmental protection policies in 2010.
The results of this paper have several policy implications in relation to the control of environmental pollution in China. First, the government should further enhance the public awareness of the need for environmental protection. To enhance the supervisory role of the public and the media, the government should also vigorously encourage the media to report environmental problems in a timely and objective manner. Second, the relevant government departments should further use administrative and financial means to strengthen the supervision and restraint of the environmental pollution from enterprises. Third, government departments should adhere to the principles of fairness and openness when enforcing environmental protection laws and credit resource allocation.
This paper contributes to the literature in several ways. First, the paper proposes and empirically tests the unique mechanisms of the effects of incidents of environmental pollution on the firm value of listed companies, which are government supervision and access to debt financing. Second, this paper investigates the relationship between the reporting of environmental pollution and firm value over a long sample period and using a rigorous research design, and thus makes a useful addition to the literature on the relationship between the reporting of environmental pollution and firm value in China. Third, this paper presents an innovative analysis of the heterogeneity of the economic consequences of incidents of environmental pollution among different firms. We plan to explore other possible mechanisms of the effects of environmental pollution on firm value in future studies.
|
|
Received: 22 August 2017
Published: 23 August 2019
|
|
|
|
|
| [1] |
陈冬华、章铁生和李翔,2008,《法律环境、政府管制与隐性契约》,《经济研究》第3期,第60～72页。
|
| [2] |
郭永济和张谊浩,2016,《空气质量会影响股票市场吗？》,《金融研究》第2期,第71～85页。
|
| [3] |
金宇超、施文、唐松和靳庆鲁,2018,《产业政策中的资金配置,市场力量与政府扶持》,《财经研究》第4期,第4～19页。
|
| [4] |
孔东民、徐茗丽和黄京,2013,《环境污染、媒体曝光与不同类型的投资者反应》,《华中科技大学学报(社会科学版)》第2期,第82～89页。
|
| [5] |
雷倩华、罗党论和王珏,2014,《环保监管、政治关联与企业价值——基于中国上市公司的经验证据》,《山西财经大学学报》第9期,第81～91页。
|
| [6] |
刘运国和刘梦宁,2015,《雾霾影响了重污染企业的盈余管理吗？——基于政治成本假说的考察》,《会计研究》第3期,第26～33页。
|
| [7] |
苏冬蔚和连莉莉,2018,《绿色信贷是否影响重污染企业的投融资行为？》,《金融研究》第12期,第123～137页。
|
| [8] |
杨涛和郭萌萌,2019,《投资者关注度与股票市场——以PM2.5概念股为例》,《金融研究》第5期,第190-206页。
|
| [9] |
余明桂和潘红波,2008,《政府干预、法治、金融发展与国有企业银行贷款》,《金融研究》第9期,第1～22页。
|
| [10] |
原毅军和谢荣辉,2014,《环境规制的产业结构调整效应研究——基于中国省际面板数据的实证检验》,《中国工业经济》第8期,第57～69页。
|
| [11] |
Brown, C. O. and I. S. Dinç, 2005, “The Politics of Bank Failures: Evidence from Emerging Markets,” The Quarterly Journal of Economics, 120(4): 1413～1444.
|
| [12] |
Capelle-Blancard, G. and M. Laguna, 2010, “How Does the Stock Market Respond to Chemical Disasters？” Journal of Environmental Economics and Management, 59(2): 192～205.
|
| [13] |
Cormier, D., M. Magnan, and B. Morard, 1993, “The Impact of Corporate Pollution on Market Valuation: Some Empirical Evidence,” Ecological Economics, 8(2): 135～155.
|
| [14] |
Dasgupta, S., B. Laplante, N. Mamingi, and H. Wang, 2001, “Inspections, Pollution Prices, and Environmental Performance: Evidence from China,” Ecological Economics, 36(3): 487～498.
|
| [15] |
Dinç, I. S., 2005, “Politicians and Banks: Political Influences on Government-Owned Banks in Emerging Markets,” Journal of Financial Economics, 77(2): 453～479.
|
| [16] |
Dimpfl, T. and S. Jank, 2016, “Can Internet Search Queries Help to Predict Stock Market Volatility？” European Financial Management, 22(2): 171～192.
|
| [17] |
Greenstone, M. and R. Hanna, 2014, “Environmental Regulations, Air and Water Pollution, and Infant Mortality in India,” American Economic Review, 104(10): 3038～3072.
|
| [18] |
Gupta, S. and B. Goldar, 2005, “Do Stock Markets Penalize Environment～Unfriendly Behavior？ Evidence from India,” Ecological Economics, 52(1): 81～95.
|
| [19] |
Karpoff, J. M., J. R. Lott, and E. W. Wehrly, 2005, “The Reputational Penalties for Environmental Violations: Empirical Evidence,” The Journal of Law and Economics, 48(2): 653～675.
|
| [20] |
Konisky, D. M. and M. P. Teodoro, 2016, “When Governments Regulate Governments,” American Journal of Political Science, 60(3): 563～565.
|
| [21] |
Lanoie, P., B. Laplante, and M. Roy, 1998, “Can Capital Markets Create Incentives for Pollution Control？” Ecological Economics, 26(1): 31～41.
|
| [22] |
Laplante, B. and P. Lanoie, 1994, “The Market Response to Environmental Incidents in Canada: A Theoretical and Empirical Analysis,” Southern Economic Journal, 60(3): 657～672.
|
| [23] |
Mcmahon, W. W., 2002, Education and Development: Measuring the Social Benefits, Oxford University Press.
|
| [24] |
Watts, R. L. and J. L. Zimmerman, 1986, Positive Accounting Theory, Prentice Hall.
|
|
|
|
