Asymmetry in Value Relevance of Environmental Performance Information: Contingency Effects of Size and Industry
2013 (English)In: Journal of Modern Accounting and Auditing, ISSN 1548-6583, E-ISSN 1935-9683, Vol. 9, no 6, 777-789 p.Article in journal (Refereed) Published
Contemporary research documents a positive but weak price premium from environmental performance (EP). The specific circumstances of pricing EP of large and small companies and in polluting and clean industries have not, however, been investigated. This study predicts that financial markets price EP beyond financial fundamentals differently, depending on company size and the environmental risk of the industry and provides evidence relying on a set of the Sweden Stock Market 300 (SIX 300) companies listed on the Stockholm Stock Exchange (OMX Stockholm). Applying a value relevance model, the average results are in line with previous findings that EP adds value beyond the book value of equity and earnings. The asymmetry in EP is. however, driven by company size and the environmental risk of the industry. This study suggests that large companies in low-risk industries obtain strong price premiums from being environmental industry leaders. In contrast, small companies and also companies in high-risk industries do not necessarily accrue the same market benefits.
Place, publisher, year, edition, pages
USA: David Publishing Company , 2013. Vol. 9, no 6, 777-789 p.
environmental performance (EP), market premium, industry risk, size, moderated regression analysis (MRA)
Research subject Business Studies
IdentifiersURN: urn:nbn:se:umu:diva-67466OAI: oai:DiVA.org:umu-67466DiVA: diva2:612084
FunderMistra - The Swedish Foundation for Strategic Environmental Research