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Green revenues and stock returns: Cross-market evidence

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  • Bassen, Alexander
  • Shu, Hao
  • Tan, Weiqiang

Abstract

This study provides cross-market evidence of the effects of green revenues (GRs) on stock returns. Using 9,367 firm-year observations across 23 different markets from 2016 to 2020, we find that firms with high proportions of GRs earn higher returns than those with low proportions of GRs. We also examine the effects of national culture on the risk–return characteristics of portfolios with high-GRs minus low-GRs. We find that higher positive abnormal returns can be earned in markets with national cultural values that are higher (lower) in harmony (mastery) and egalitarianism (hierarchy).

Suggested Citation

  • Bassen, Alexander & Shu, Hao & Tan, Weiqiang, 2023. "Green revenues and stock returns: Cross-market evidence," Finance Research Letters, Elsevier, vol. 52(C).
    • Handle: RePEc:eee:finlet:v:52:y:2023:i:c:s1544612322007267
    DOI: 10.1016/j.frl.2022.103550
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    References listed on IDEAS

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    Cited by:

    1. Liu, Zhihong & ul Islam, Misbah & Alarifi, Ghadah Abdulrahman & Cong, Phan The & Khudoykulov, Khurshid & Quynh, Le Nhu & Hossain, Md. Shamim, 2023. "Does energy efficiency mediate a green economic recovery? Evidence from China," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 802-815.

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    More about this item

    Keywords

    Sustainable investment; Green revenues; Portfolio; Multi-factor asset pricing model; Stock returns;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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