IDEAS home Printed from https://ideas.repec.org/a/eee/jrpoli/v85y2023ipbs0301420723006372.html
   My bibliography  Save this article

Green financial regulation and shale gas resources management

Author

Listed:
  • Hu, Hui
  • Xiong, Shuaizhou
  • Wang, Zeyu
  • Wang, Zishuo
  • Zhou, Xiang

Abstract

Managing shale gas resources can cause environmental, safety, and other sustainability issues. The Environment, Society, and Governance (ESG) report is seen as an important way to promote responsible natural resources management through green finance regulation. The China Petrochemical Corporation (Sinopec Group) published the first ESG report of the Chinese mainland in 2014 to highlight sustainable issues. Assessing the financial impact of this significant ESG report on shale gas companies is of interest to researchers and practitioners. This study used both the event study and bootstrap regression to analyze the impact of the ESG report on the market performance of shale-gas-related companies. The results demonstrate the heterogeneity of the impact of the ESG report on the management of shale gas resources by relevant listed companies. The report provided short-term positive returns to its issuer and potential associates. The stock returns of private companies and smaller companies are significantly negatively affected by the ESG announcement. Companies listed in Shenzhen suffer greater losses in shares after the ESG announcement than those listed in Shanghai. The ESG announcement heterogeneously affects the stock return of companies engaged in shale gas exploration, production, sale, transmission, and integrated business. The results of this paper are informative for regulating shale gas resources management through financial measures.

Suggested Citation

  • Hu, Hui & Xiong, Shuaizhou & Wang, Zeyu & Wang, Zishuo & Zhou, Xiang, 2023. "Green financial regulation and shale gas resources management," Resources Policy, Elsevier, vol. 85(PB).
    • Handle: RePEc:eee:jrpoli:v:85:y:2023:i:pb:s0301420723006372
    DOI: 10.1016/j.resourpol.2023.103926
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301420723006372
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.resourpol.2023.103926?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Sandra A. Waddock & Samuel B. Graves, 1997. "The Corporate Social Performance–Financial Performance Link," Strategic Management Journal, Wiley Blackwell, vol. 18(4), pages 303-319, April.
    2. Tan, Xianchun & Dong, Lele & Chen, Dexue & Gu, Baihe & Zeng, Yuan, 2016. "China’s regional CO2 emissions reduction potential: A study of Chongqing city," Applied Energy, Elsevier, vol. 162(C), pages 1345-1354.
    3. Hu, Hui & Xie, Nan & Fang, Debin & Zhang, Xiaoling, 2018. "The role of renewable energy consumption and commercial services trade in carbon dioxide reduction: Evidence from 25 developing countries," Applied Energy, Elsevier, vol. 211(C), pages 1229-1244.
    4. Roger C. Y. Chen & Shih-Wei Hung & Chen-Hsun Lee, 2017. "Does corporate value affect the relationship between Corporate Social Responsibility and stock returns?," Journal of Sustainable Finance & Investment, Taylor & Francis Journals, vol. 7(2), pages 188-196, April.
    5. Shidi Dong & Lei Xu & Ron McIver, 2020. "China’s financial sector sustainability and “green finance” disclosures," Sustainability Accounting, Management and Policy Journal, Emerald Group Publishing Limited, vol. 12(2), pages 353-384, October.
    6. Terence J. Centner & Nicholas S. Eberhart, 2016. "The use of best management practices to respond to externalities from developing shale gas resources," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 59(4), pages 746-768, April.
    7. Prayag Lal Yadav & Seung Hun Han & Jae Jeung Rho, 2016. "Impact of Environmental Performance on Firm Value for Sustainable Investment: Evidence from Large US Firms," Business Strategy and the Environment, Wiley Blackwell, vol. 25(6), pages 402-420, September.
    8. Peng, Wei & Xiong, Langyu, 2022. "Managing financing costs and fostering green transition: The role of green financial policy in China," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 820-836.
    9. Alina Sorescu & Nooshin L. Warren & Larisa Ertekin, 2017. "Event study methodology in the marketing literature: an overview," Journal of the Academy of Marketing Science, Springer, vol. 45(2), pages 186-207, March.
    10. Kun Tracy Wang & Dejia Li, 2016. "Market Reactions to the First-Time Disclosure of Corporate Social Responsibility Reports: Evidence from China," Journal of Business Ethics, Springer, vol. 138(4), pages 661-682, November.
    11. Xiang Deng & Xiang Cheng, 2019. "Can ESG Indices Improve the Enterprises’ Stock Market Performance?—An Empirical Study from China," Sustainability, MDPI, vol. 11(17), pages 1-13, September.
    12. Yaz Gűlnur Muradoğlu & Sheeja Sivaprasad, 2012. "Using Firm‐Level Leverage as an Investment Strategy," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 31(3), pages 260-279, April.
    13. repec:hal:spmain:info:hdl:2441/3vsrea3gla9r5oaa2cle5jrqfh is not listed on IDEAS
    14. Shidi Dong & Lei Xu & Ron McIver, 2020. "China’s financial sector sustainability and “green finance” disclosures," Sustainability Accounting, Management and Policy Journal, Emerald Group Publishing Limited, vol. 12(2), pages 353-384, October.
    15. Shahzad, Umer & Gupta, Mansi & Sharma, Gagan Deep & Rao, Amar & Chopra, Ritika, 2022. "Resolving energy poverty for social change: Research directions and agenda," Technological Forecasting and Social Change, Elsevier, vol. 181(C).
    16. Bash, Ahmad & Alsaifi, Khaled, 2019. "Fear from uncertainty: An event study of Khashoggi and stock market returns," Journal of Behavioral and Experimental Finance, Elsevier, vol. 23(C), pages 54-58.
    17. Amal Aouadi & Sylvain Marsat, 2018. "Do ESG Controversies Matter for Firm Value? Evidence from International Data," Journal of Business Ethics, Springer, vol. 151(4), pages 1027-1047, September.
    18. Chitra Sriyani De Silva Lokuwaduge & Kumudini Heenetigala, 2017. "Integrating Environmental, Social and Governance (ESG) Disclosure for a Sustainable Development: An Australian Study," Business Strategy and the Environment, Wiley Blackwell, vol. 26(4), pages 438-450, May.
    19. Boubakri, Narjess & Guedhami, Omrane & Mishra, Dev & Saffar, Walid, 2012. "Political connections and the cost of equity capital," Journal of Corporate Finance, Elsevier, vol. 18(3), pages 541-559.
    20. Zhao, Jun & Jiang, Qingzhe & Dong, Xiucheng & Dong, Kangyin, 2021. "Assessing energy poverty and its effect on CO2 emissions: The case of China," Energy Economics, Elsevier, vol. 97(C).
    21. Child, Travers Barclay & Massoud, Nadia & Schabus, Mario & Zhou, Yifan, 2021. "Surprise election for Trump connections," Journal of Financial Economics, Elsevier, vol. 140(2), pages 676-697.
    22. Bixia Xu & Tao Zeng, 2016. "Profitability, state ownership, tax reporting and corporate social responsibility: evidence from Chinese listed firms," Social Responsibility Journal, Emerald Group Publishing Limited, vol. 12(1), pages 23-31, March.
    23. Liangfeng Zhu & Xueyi Zhu, 2019. "Energy policy, market environment and the economic benefits of enterprises: evidence from China’s petrochemical enterprises," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 95(1), pages 113-127, January.
    24. Frank Heflin & Dana Wallace, 2017. "The BP Oil Spill: Shareholder Wealth Effects and Environmental Disclosures," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 44(3-4), pages 337-374, March.
    25. Fama, Eugene F, 1991. "Efficient Capital Markets: II," Journal of Finance, American Finance Association, vol. 46(5), pages 1575-1617, December.
    26. Xu, Yong & Li, Shanshan & Zhou, Xiaoxiao & Shahzad, Umer & Zhao, Xin, 2022. "How environmental regulations affect the development of green finance: Recent evidence from polluting firms in China," Renewable Energy, Elsevier, vol. 189(C), pages 917-926.
    27. Barber, Brad M & Lyon, John D, 1997. "Firm Size, Book-to-Market Ratio, and Security Returns: A Holdout Sample of Financial Firms," Journal of Finance, American Finance Association, vol. 52(2), pages 875-883, June.
    28. Li, Boying & Zheng, Mingbo & Zhao, Xinxin & Chang, Chun-Ping, 2021. "An assessment of the effect of partisan ideology on shale gas production and the implications for environmental regulations," Economic Systems, Elsevier, vol. 45(3).
    29. Taghizadeh-Hesary, Farhad & Phoumin, Han & Rasoulinezhad, Ehsan, 2023. "Assessment of role of green bond in renewable energy resource development in Japan," Resources Policy, Elsevier, vol. 80(C).
    30. Zhao, Linhai & Chau, Ka Yin & Tran, Trung Kien & Sadiq, Muhammad & Xuyen, Nguyen Thi My & Phan, Thi Thu Hien, 2022. "Enhancing green economic recovery through green bonds financing and energy efficiency investments," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 488-501.
    31. X. Xu & S. Zeng & C. Tam, 2012. "Stock Market’s Reaction to Disclosure of Environmental Violations: Evidence from China," Journal of Business Ethics, Springer, vol. 107(2), pages 227-237, May.
    32. Guo, Mengmeng & Kuai, Yicheng & Liu, Xiaoyan, 2020. "Stock market response to environmental policies: Evidence from heavily polluting firms in China," Economic Modelling, Elsevier, vol. 86(C), pages 306-316.
    33. Jiao, Yawen, 2010. "Stakeholder welfare and firm value," Journal of Banking & Finance, Elsevier, vol. 34(10), pages 2549-2561, October.
    34. Hong, Ying & Hu, Jiangting & Chen, Mengyu & Tang, Shoulian, 2023. "Motives and antecedents affecting green purchase intention: Implications for green economic recovery," Economic Analysis and Policy, Elsevier, vol. 77(C), pages 523-538.
    35. Zhang, Dongyang, 2022. "Green financial system regulation shock and greenwashing behaviors: Evidence from Chinese firms," Energy Economics, Elsevier, vol. 111(C).
    36. Wong, Woei Chyuan & Batten, Jonathan A. & Ahmad, Abd Halim & Mohamed-Arshad, Shamsul Bahrain & Nordin, Sabariah & Adzis, Azira Abdul, 2021. "Does ESG certification add firm value?," Finance Research Letters, Elsevier, vol. 39(C).
    37. Kolk, Ans & Levy, David, 2001. "Winds of Change:: Corporate Strategy, Climate change and Oil Multinationals," European Management Journal, Elsevier, vol. 19(5), pages 501-509, October.
    38. Daphne W. Yiu & Yuehua Xu & William P. Wan, 2014. "The Deterrence Effects of Vicarious Punishments on Corporate Financial Fraud," Organization Science, INFORMS, vol. 25(5), pages 1549-1571, October.
    39. Gillan, Stuart L. & Koch, Andrew & Starks, Laura T., 2021. "Firms and social responsibility: A review of ESG and CSR research in corporate finance," Journal of Corporate Finance, Elsevier, vol. 66(C).
    40. Zhang, Yonggang & Dilanchiev, Azer, 2022. "Economic recovery, industrial structure and natural resource utilization efficiency in China: Effect on green economic recovery," Resources Policy, Elsevier, vol. 79(C).
    41. María D. Odriozola & Elisa Baraibar‐Diez, 2017. "Is Corporate Reputation Associated with Quality of CSR Reporting? Evidence from Spain," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 24(2), pages 121-132, March.
    42. Fang, Wei & Liu, Zhen & Surya Putra, Ahmad Romadhoni, 2022. "Role of research and development in green economic growth through renewable energy development: Empirical evidence from South Asia," Renewable Energy, Elsevier, vol. 194(C), pages 1142-1152.
    43. Hasan, Mohammad Maruf & Du, Fang, 2023. "The role of foreign trade and technology innovation on economic recovery in China: The mediating role of natural resources development," Resources Policy, Elsevier, vol. 80(C).
    44. Julian F. Kölbel & Timo Busch & Leonhardt M. Jancso, 2017. "How Media Coverage of Corporate Social Irresponsibility Increases Financial Risk," Strategic Management Journal, Wiley Blackwell, vol. 38(11), pages 2266-2284, November.
    45. Laura Mervelskemper & Daniel Streit, 2017. "Enhancing Market Valuation of ESG Performance: Is Integrated Reporting Keeping its Promise?," Business Strategy and the Environment, Wiley Blackwell, vol. 26(4), pages 536-549, May.
    46. Hammad Riaz & Abubakr Saeed, 2020. "Impact of environmental policy on firm's market performance: The case of ISO 14001," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(2), pages 681-693, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lin, Weiwen & Qin, Shan & Zhou, Xinzhu & Guan, Xin & Zeng, Yanzhao & Wang, Zeyu & Shen, Yaohan, 2024. "Three-dimensional quantitative mineral prediction from convolutional neural network model in developing intelligent cleaning technology," Resources Policy, Elsevier, vol. 88(C).
    2. Wang, Huaxing & Li, Tianzi & Zhu, Junfan & Jian, Youting & Wang, Zeyu & Wang, Zengwen, 2023. "China's new environmental protection law: Implications for mineral resource policy, environmental precaution and green finance," Resources Policy, Elsevier, vol. 85(PB).
    3. Yang, Ya & Zhou, Mengru & Hou, Yawei & Tang, Run & Liu, Bo & Deng, Yue, 2023. "Examining the impacts of implicit economic policy on urban environmental pollution: Unveiling pathways for sustainable recovery," Resources Policy, Elsevier, vol. 85(PA).
    4. Yuwei Liu & Shan Qin & Jiamin Li & Ting Jin, 2023. "Artificial Intelligence and Street Space Optimization in Green Cities: New Evidence from China," Sustainability, MDPI, vol. 15(23), pages 1-15, November.
    5. Xinao Li, 2024. "The Impact of Technology Mergers and Acquisitions on Enterprise Sustainable Competitiveness," Sustainability, MDPI, vol. 16(6), pages 1-31, March.
    6. Shuhui Yu & Ya Yang & Jiamin Li & Keyu Guo & Zeyu Wang & Yuwei Liu, 2024. "Exploring low-carbon and sustainable urban transformation design using ChatGPT and artificial bee colony algorithm," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-14, December.
    7. Hui Hu & Yuqi Zhu & Chien-Chiang Lee & Alastair M. Morrison, 2023. "The effects of foreign product demand-labor transfer nexus on human capital investment in China," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-13, December.
    8. Zhang, Jingshen & Zhou, Xinzhu & Bai, Rong & Dong, Haoyang & Tang, Tingting & Wang, Zeyu & Yang, Ya & Huang, Feng, 2024. "Impact of environmental supervision reform on green innovation in mineral enterprises," Resources Policy, Elsevier, vol. 88(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zhao, Xing & Guo, Yifan & Feng, Tianchu, 2023. "Towards green recovery: Natural resources utilization efficiency under the impact of environmental information disclosure," Resources Policy, Elsevier, vol. 83(C).
    2. Rajesh, R. & Rajeev, A. & Rajendran, Chandrasekharan, 2022. "Corporate social performances of firms in select developed economies: A comparative study," Socio-Economic Planning Sciences, Elsevier, vol. 81(C).
    3. Khan, Muhammad Arif, 2022. "ESG disclosure and Firm performance: A bibliometric and meta analysis," Research in International Business and Finance, Elsevier, vol. 61(C).
    4. Chen, Zhongfei & Xie, Guanxia, 2022. "ESG disclosure and financial performance: Moderating role of ESG investors," International Review of Financial Analysis, Elsevier, vol. 83(C).
    5. Liu, Xiaoqian & Cifuentes-Faura, Javier & Zhao, Shikuan & Wang, Long, 2024. "The impact of government environmental attention on firms’ ESG performance: Evidence from China," Research in International Business and Finance, Elsevier, vol. 67(PA).
    6. Al-Shaer, Habiba & Uyar, Ali & Kuzey, Cemil & Karaman, Abdullah S., 2023. "Do shareholders punish or reward excessive CSR engagement? Moderating effect of cash flow and firm growth," International Review of Financial Analysis, Elsevier, vol. 88(C).
    7. Chung, Yessica C.Y. & Kunene, Noxolo & Chang, Hung-Hao, 2024. "Renewable energy certificates and firm value: Empirical evidence in Taiwan," Energy Policy, Elsevier, vol. 184(C).
    8. Wong, Jin Boon & Zhang, Qin, 2022. "Stock market reactions to adverse ESG disclosure via media channels," The British Accounting Review, Elsevier, vol. 54(1).
    9. Denny IRAWAN & OKIMOTO Tatsuyoshi, 2021. "How Do ESG Performance and Awareness Affect Firm Value and Corporate Overinvestment?," Discussion papers 21033, Research Institute of Economy, Trade and Industry (RIETI).
    10. Yu, Haixu & Liang, Chuanyu & Liu, Zhaohua & Wang, He, 2023. "News-based ESG sentiment and stock price crash risk," International Review of Financial Analysis, Elsevier, vol. 88(C).
    11. Hans B. Christensen & Luzi Hail & Christian Leuz, 2021. "Mandatory CSR and sustainability reporting: economic analysis and literature review," Review of Accounting Studies, Springer, vol. 26(3), pages 1176-1248, September.
    12. Petridis, Konstantinos & Tampakoudis, Ioannis & Drogalas, George & Kiosses, Nikolaos, 2022. "A Support Vector Machine model for classification of efficiency: An application to M&A," Research in International Business and Finance, Elsevier, vol. 61(C).
    13. Selena Aureli & Sabrina Gigli & Renato Medei & Enrico Supino, 2020. "The value relevance of environmental, social, and governance disclosure: Evidence from Dow Jones Sustainability World Index listed companies," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(1), pages 43-52, January.
    14. Jun Xie & Wataru Nozawa & Michiyuki Yagi & Hidemichi Fujii & Shunsuke Managi, 2019. "Do environmental, social, and governance activities improve corporate financial performance?," Business Strategy and the Environment, Wiley Blackwell, vol. 28(2), pages 286-300, February.
    15. Di Chen & Yue Wang & Yang Wen & Honglin Du & Xue Tan & Lei Shi & Zhong Ma, 2021. "Does Environmental Policy Help Green Industry? Evidence from China’s Promotion of Municipal Solid Waste Sorting," IJERPH, MDPI, vol. 18(6), pages 1-15, March.
    16. Maria del Mar Miralles‐Quiros & Jose Luis Miralles‐Quiros & Irene Guia Arraiano, 2017. "Sustainable Development, Sustainability Leadership and Firm Valuation: Differences across Europe," Business Strategy and the Environment, Wiley Blackwell, vol. 26(7), pages 1014-1028, November.
    17. Mercedes Rubio‐Andrés & María del Mar Ramos‐González & Miguel Ángel Sastre‐Castillo & Ignacio Danvila‐del‐Valle, 2020. "Exploring sustainability, good governance, and social responsibility in small and medium enterprises," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 27(2), pages 852-869, March.
    18. Ioannis Tampakoudis & Evgenia Anagnostopoulou, 2020. "The effect of mergers and acquisitions on environmental, social and governance performance and market value: Evidence from EU acquirers," Business Strategy and the Environment, Wiley Blackwell, vol. 29(5), pages 1865-1875, July.
    19. Wang, Ren & Bian, Yuxiang & Xiong, Xiong, 2024. "Impact of ESG preferences on investments and emissions in a DSGE framework," Economic Modelling, Elsevier, vol. 135(C).
    20. Anita, Mendiratta & Shveta, Singh & Yadav Surendra, S. & Arvind, Mahajan, 2023. "When do ESG controversies reduce firm value in India?," Global Finance Journal, Elsevier, vol. 55(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jrpoli:v:85:y:2023:i:pb:s0301420723006372. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/30467 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.