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NEP: New Economics Papers
Agricultural Economics
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Edited by: Angelo Zago
http://ideas.repec.org/e/pza49.html
Universita degli Studi di Verona
Date: 2005-09-02
Papers: 1
This document is in the public domain, feel free to circulate it.
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In this issue we have:
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1. Environmental news and stock markets performance: Further
evidence for Argentina
Mariana Conte Grand; Vanesa V. D'Elia
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1. Environmental news and stock markets performance: Further
evidence for Argentina
Mariana Conte Grand
Vanesa V. D'Elia
More and more firms tend nowadays to adopt environment-friendly
attitudes. Their motivation originates in local environmental
regulations or requirements of foreign markets to which firms
export (both induced by consumers and investors? valuation of
pro-environment initiatives). There is a well-established
literature capturing the impact on stock prices of environmental
information releases using the event study methodology. Studies
are usually based on information environmental regulation (i.e.,
the regulator announcement of emissions or compliance status with
respect to standards) or on simple media coverage of
environmental news. Dasgupta, Laplante and Mamingi (2001) is one
of the few references to show that public information on
environmental behavior has impact on stock prices in the
developing world. It includes Argentina in its analysis together
with Chile, Mexico and the Philippines. In this manuscript, we
focus specifically on Argentina. We find that positive
environmental news have no impact, while negative news do have an
effect on average rates of return a few days following its
appearance. But, when focusing on different types of positive
news, we find that ISO certification has no effect whatsoever,
while investment decisions do have some positive significant
influence on returns. On the other side, negative news influence
on stock returns is particularly significant for events linked to
citizen complaints and government rulings (confirming other
studies results) and for media coverage of oil company issues.
However, we find abnormal returns of a much smaller magnitude
than other studies for developing countries. We believe that is
readonable because there seem to be no reason why the level of
abnormal returns (not its volatility) should be larger for
environmental news in developing countries than in developed ones.
Keywords: developing countries, environmental management,
environmental news, capital markets, event study
JEL: Q58 G14
Date: 2005-08
URL: http://d.repec.org/n?u=RePEc:cem:doctra:300&r=agr
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