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Is There A Green Link A Panel Data Value Event Study Of The Relationship Between Capital Markets And Toxic Releases

Author

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  • Amarnath Ananthanarayanan

    () (Rutgers University)

Abstract

This paper attempts to look at the effectiveness of public provision of pollution information in providing incentives for firms to control pollution. This is achieved by examining the effect of release of pollution information on the market value of firms. The paper conducts a value event study using the U.S Environmental Protection Agency's Toxic Release Inventory Program as the basis for its analysis. We conclude that there are significant negative abnormal returns on the day of the release of the pollution information for all the seven releases put together. But, there are no significant negative abnormal returns for each of the seven releases when we incorporate the contemporaneous correlation of the returns and inter-temporal correlation of the estimated abnormal returns. In addition, this negative effect peters away as the length of the event period is extended to include the four days after the release of the information as well.

Suggested Citation

  • Amarnath Ananthanarayanan, 1998. "Is There A Green Link A Panel Data Value Event Study Of The Relationship Between Capital Markets And Toxic Releases," Departmental Working Papers 199818, Rutgers University, Department of Economics.
  • Handle: RePEc:rut:rutres:199818
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    File URL: http://www.sas.rutgers.edu/virtual/snde/wp/1998-18.pdf
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    References listed on IDEAS

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    1. Hausman, Jerry, 2015. "Specification tests in econometrics," Applied Econometrics, Publishing House "SINERGIA PRESS", pages 112-134.
    2. Salinger, Michael, 1992. "Standard Errors in Event Studies," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 27(01), pages 39-53, March.
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    6. Konar, Shameek & Cohen, Mark A., 1997. "Information As Regulation: The Effect of Community Right to Know Laws on Toxic Emissions," Journal of Environmental Economics and Management, Elsevier, vol. 32(1), pages 109-124, January.
    7. Kennedy, P. & Laplante, B. & Maxwell, J., 1990. "Pollution Policy: The Role of Publicly Provided Information," Papers 9021, Laval - Recherche en Energie.
    8. Fama, Eugene F, 1970. "Efficient Capital Markets: A Review of Theory and Empirical Work," Journal of Finance, American Finance Association, vol. 25(2), pages 383-417, May.
    9. Lanoie, Paul & Laplante, Benoit & Roy, Maite, 1997. "Can capital markets create incentives for pollution control?," Policy Research Working Paper Series 1753, The World Bank.
    10. repec:bla:joares:v:21:y:1983:i:1:p:184-221 is not listed on IDEAS
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    Citations

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    Cited by:

    1. Stavins, Robert N., 2003. "Experience with market-based environmental policy instruments," Handbook of Environmental Economics,in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 1, chapter 9, pages 355-435 Elsevier.
    2. Stavins, Robert, 2001. "Lessons from the American Experiment with Market-Based Environmental Policies," Working Paper Series rwp01-032, Harvard University, John F. Kennedy School of Government.
    3. Stavins, Robert, 2003. "Market-Based Environmental Policies: What Can We Learn from U.S. Experience (and Related Research)?," Discussion Papers dp-03-43, Resources For the Future.

    More about this item

    Keywords

    Environment Pollution; Event Study; Panel Data; Seemingly Unrelated Regressions (SUR); Toxic Release Inventory (TRI);

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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