Journal ArticleDOI
Does the Market Value Environmental Performance
Shameek Konar,Mark A. Cohen +1 more
TLDR
This paper found that bad environmental performance is negatively correlated with the intangible asset value of firms, and that legally emitted toxic chemicals have a significant effect on the intangible assets of publicly traded companies.Abstract:
Previous studies that attempt to relate environmental to financial performance have often led to conflicting results due to small samples and subjective environmental performance criteria. We report on a study that relates the market value of firms in the S&P 500 to objective measures of their environmental performance. After controlling for variables traditionally thought to explain firm-level financial performance, we find that bad environmental performance is negatively correlated with the intangible asset value of firms. The average ‘intangible liability’ for firms in our sample is $380 million—approximately 9% of the replacement value of tangible assets. We conclude that legally emitted toxic chemicals have a significant effect on the intangible asset value of publicly traded companies. A 10% reduction in emissions of toxic chemicals results in a $34 million increase in market value. The magnitude of these effects varies across industries, with larger losses accruing to the traditionally polluting in...read more
Citations
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Journal ArticleDOI
Misery Loves Companies: Rethinking Social Initiatives by Business:
TL;DR: The authors argue that companies are increasingly asked to provide innovative solutions to deep-seated problems of human misery, even as economic theory instructs managers to focus on maximizing their shareholders' wealt.
Journal ArticleDOI
Corporate Social Responsibility and Resource-Based Perspectives
TL;DR: In this article, a resource-based perspective is used to understand why firms engage in corporate social responsibility (CSR) activities and disclosure, which can be seen as providing internal or external benefits, or both.
Journal ArticleDOI
Socially responsible investments: Institutional aspects, performance, and investor behavior
TL;DR: In this paper, the authors provide a critical review of the literature on socially responsible investments (SRI) and conclude that existing studies hint but do not unequivocally demonstrate that SRI investors are willing to accept suboptimal financial performance to pursue social or ethical objectives.
Journal ArticleDOI
Does it Pay to Be Good...And Does it Matter? A Meta-Analysis of the Relationship between Corporate Social and Financial Performance
TL;DR: This article conducted a meta-analysis of 251 studies presented in 214 manuscripts and found that the overall effect is positive but small (mean r =.13, median r = 0.09, weighted r = 1.11), and results for the 106 studies from the past decade are even smaller.
Journal ArticleDOI
Does it pay to be different? An analysis of the relationship between corporate social and financial performance
TL;DR: This article explored the relationship between corporate social performance (CSP) and corporate financial performance within the context of a specific component of CSP: corporate charitable giving and found that firms with both unusually high and low CSP have higher financial performance than other firms.
References
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Journal ArticleDOI
Efficient capital markets: a review of theory and empirical work*
TL;DR: Efficient Capital Markets: A Review of Theory and Empirical Work Author(s): Eugene Fama Source: The Journal of Finance, Vol. 25, No. 2, Papers and Proceedings of the Twenty-Eighth Annual Meeting of the American Finance Association New York, N.Y. December, 28-30, 1969 (May, 1970), pp. 383-417 as mentioned in this paper
Posted Content
Technological Opportunity and Spillovers of R&D: Evidence from Firms' Patents, Profits and Market Value
TL;DR: In this article, the authors present evidence that firms' patents, profits and market value are systematically related to the technological position of firms' research programs, and that firms are seen to "move" in technology space in response to the pattern of contemporaneous profits at different positions.
ReportDOI
Technological Opportunity and Spillovers of R&D: Evidence from Firms' Patents, Profits, and Market Value
TL;DR: In this article, the effects of exogenous variations in the state of technology (technological opportunity) and of the R&D of other firms (spillovers of r&D) on the productivity of firms' R&Ds were quantified.
Journal ArticleDOI
The impact of environmental management on firm performance
TL;DR: In this paper, a theoretical model is proposed that links strong environmental management to improved perceived future financial performance, as measured by stock market performance, and the linkage to firm performance is tested empirically using financial event methodology and archival data of firm-level environmental and financial performance.
Posted Content
A Simple Approximation of Tobin's Q
Kee H. Chung,Stephen W. Pruitt +1 more
TL;DR: The authors developed a simple formula for approximating Tobin's q. The formula requires only basic financial and accounting information, and results of a series of regressions comparing their approximate q values with those obtained via Lindenberg and Ross' (1981) more theoretically correct model indicate that at least 96.6% of the variability of Tobin' s q is explained by approximate q.
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