Campus Units

Economics

Document Type

Article

Publication Version

Accepted Manuscript

Publication Date

2015

Journal or Book Title

Environmental and Resource Economics

Volume

60

Issue

4

First Page or Article ID Number

583

Last Page

605

DOI

10.1007/s10640-014-9781-0

Abstract

We use event study analysis to determine whether the release of Newsweek’s “Global 100 Ranking” is relevant for the market. We look at one- and two-day event windows to check two possible reactions of the market: changes in the value of an equal-weight portfolio, and changes in the relative price of the stocks. The results show that the market reacted to the “Global 100 Ranking” by changing the relative price of the stocks, but not the value of the portfolio. Specifically, getting one position closer to the top of Newsweek’s “Global 100 Green Rankings” increases the value of an average firm in the list by eleven million dollars. There is also some evidence of a stronger reaction of non-US-traded stocks compared to US-traded ones. Non-heavy sector stocks display a more robust reaction than heavy sector stocks. We find that investors in US-traded stocks are interested in past environmental performance and managerial quality, while the second is more relevant for investors in non-US-traded stocks. Results are robust to alternative model specifications.

Comments

This is manuscript of an article from Environmental and Resource Economics 60 (2015): 583, doi:10.1007/s10640-014-9781-0. The final publication is available at Springer via http://dx.doi.org/10.1007/s10640-014-9781-0.

Copyright Owner

Springer

Language

en

File Format

application/pdf