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Stock Market Reactions to Environmental News in the Food Industry

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  • Deák, Zsuzsanna
  • Karali, Berna

Abstract

Few studies to date have addressed the relationship between the food industry's environmental and financial performances although the industry is one of the biggest contributors of greenhouse gas emissions. We analyze the impact of environmental news about selected food companies on their stock prices. Results show that positive (negative) events that are the result of direct internal company actions lead to higher (lower) predicted returns, whereas events related to third-party opinions lead to smaller changes in predicted returns in short event windows. This study highlights the importance of conducting the analysis on a disaggregated basis by incorporating firm-level variables.

Suggested Citation

  • Deák, Zsuzsanna & Karali, Berna, 2014. "Stock Market Reactions to Environmental News in the Food Industry," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 46(2), pages 209-225, May.
    • Handle: RePEc:cup:jagaec:v:46:y:2014:i:02:p:209-225_00
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    2. Md. Mahmudul Alam & Haitian Wei & Abu N. M. Wahid, 2021. "COVID‐19 outbreak and sectoral performance of the Australian stock market: An event study analysis," Australian Economic Papers, Wiley Blackwell, vol. 60(3), pages 482-495, September.
    3. Pozo, Veronica F. & Schroeder, Ted C., 2016. "Evaluating the costs of meat and poultry recalls to food firms using stock returns," Food Policy, Elsevier, vol. 59(C), pages 66-77.
    4. Huang, Xuan & An, Haizhong & Fang, Wei & Gao, Xiangyun & Wang, Lijun & Sun, Xiaoqi, 2016. "Impact assessment of international anti-dumping events on synchronization and comovement of the Chinese photovoltaic stocks," Renewable and Sustainable Energy Reviews, Elsevier, vol. 59(C), pages 459-469.
    5. Nerger, Gian-Luca & Huynh, Toan Luu Duc & Wang, Mei, 2021. "Which industries benefited from Trump environmental policy news? Evidence from industrial stock market reactions," Research in International Business and Finance, Elsevier, vol. 57(C).

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    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General

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