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Environmental incidents and firm value: international evidence using a multi-factor event study framework
Umeå University, Faculty of Social Sciences, Umeå School of Business. (Department of Forest Economics, Centre of Environmental and Resource Economics, Swedish University of Agricultural Sciences, 901 87 Umeå, Sweden)
Umeå University, Faculty of Social Sciences, Umeå School of Business.
2010 (English)In: Applied Financial Economics, ISSN 0960-3107, E-ISSN 1466-4305, Vol. 20, no 16, 1293-1307 p.Article in journal (Refereed) Published
Abstract [en]

Event study methodology is used to analyse whether bad news in the form of Environmental (EV) incidents affect firm value negatively. An international sample of firms with EV incidents is studied. It is found that EV incidents are generally associated with the loss of value. For European firms, the loss is statistically significant and the magnitude of the abnormal returns should be of economic significance to corporations and investors. The results are not sensitive to multiple variations in methodology, including the use of international versions of the market model as well as of multi-factor models of the Fama-French type. Results are also robust to different parametric and nonparametric test statistics.

Place, publisher, year, edition, pages
2010. Vol. 20, no 16, 1293-1307 p.
URN: urn:nbn:se:umu:diva-38781DOI: 10.1080/09603107.2010.482516OAI: diva2:381943
Available from: 2010-12-29 Created: 2010-12-29 Last updated: 2011-03-31Bibliographically approved

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Lundgren, TommyOlsson, Rickard
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