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Environmental Policy, Rankings and Stock Values

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  • Louis H. Amato
  • Christie H. Amato

Abstract

This paper examines the impact of Newsweek's ‘The Greenest Big Companies in America’ on stock values for large companies. Newsweek ranks the biggest Companies in America from one to 500. An event window of ten days following the rankings release to the public was examined to analyze the impact of relative rankings on stock values. Dummy variables were constructed denoting firms ranked in the highest and lowest quartiles. Control variables included return to the Dow Jones Industrial Average, the firm's beta coefficient and total revenue. The main finding of the study is that inclusion in the top quartile of the rankings has a positive and statistically significant impact on firms' stock values, while the coefficient for the lowest quartile was not statistically different from zero. The results provide evidence of a positive impact on stock values from favorable environmental recognition but no effect for low ranked firms. Copyright © 2011 John Wiley & Sons, Ltd and ERP Environment.

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  • Louis H. Amato & Christie H. Amato, 2012. "Environmental Policy, Rankings and Stock Values," Business Strategy and the Environment, Wiley Blackwell, vol. 21(5), pages 317-325, July.
    • Handle: RePEc:bla:bstrat:v:21:y:2012:i:5:p:317-325
    DOI: 10.1002/bse.742
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    18. Anni Tuppura & Anne Toppinen & Kaisu Puumalainen, 2016. "Forest Certification and ISO 14001: Current State and Motivation in Forest Companies," Business Strategy and the Environment, Wiley Blackwell, vol. 25(5), pages 355-368, July.
    19. Marc Bascompta & Lluís Sanmiquel & Carla Vintró & Mohammad Yousefian, 2022. "Corporate Social Responsibility Index for Mine Sites," Sustainability, MDPI, vol. 14(20), pages 1-24, October.
    20. Rahman, Mahabubur, 2023. "The virtuous circle between green product innovation and performance: The role of financial constraint and corporate brand," Journal of Business Research, Elsevier, vol. 154(C).
    21. Prayag Lal Yadav & Seung Hun Han & Hohyun Kim, 2017. "Manager’s Dilemma: Stockholders’ and Consumers’ Responses to Corporate Environmental Efforts," Sustainability, MDPI, vol. 9(7), pages 1-14, June.
    22. Juan Jose Duran & Nuria Bajo, 2014. "Institutions as Determinant Factors of Corporate Responsibility Strategies of Multinational Firms," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 21(6), pages 301-317, November.
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    24. Mohammad Jizi, 2017. "The Influence of Board Composition on Sustainable Development Disclosure," Business Strategy and the Environment, Wiley Blackwell, vol. 26(5), pages 640-655, July.

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