IDEAS home Printed from https://ideas.repec.org/a/eee/finlet/v56y2023ics1544612323005159.html
   My bibliography  Save this article

Retail investor attention and corporate environmental performance: Evidence from china

Author

Listed:
  • Ming, Yaxin
  • Li, Yubo
  • Liu, Nian
  • Li, Jing

Abstract

Utilizing the data collected from all Chinese-listed companies from 2010 to 2019, this study investigates the relationship between retail investor attention and corporate environmental performance. Our analysis shows that investor attention is positively and significantly related with corporate environmental performance, which is robust to various tests. We further find that the positive relationship is more pronounced for firms with more investor inquires, as well as those with higher analyst and media coverage. The study contributes to the existing literature on the drivers of corporate environmental performance, and highlights the crucial role that retail investors play in shaping firm environmental activities.

Suggested Citation

  • Ming, Yaxin & Li, Yubo & Liu, Nian & Li, Jing, 2023. "Retail investor attention and corporate environmental performance: Evidence from china," Finance Research Letters, Elsevier, vol. 56(C).
    • Handle: RePEc:eee:finlet:v:56:y:2023:i:c:s1544612323005159
    DOI: 10.1016/j.frl.2023.104143
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1544612323005159
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.frl.2023.104143?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. Hao, Jing, 2023. "Retail investor attention and corporate innovation in the big data era," International Review of Financial Analysis, Elsevier, vol. 86(C).
    2. Hainmueller, Jens, 2012. "Entropy Balancing for Causal Effects: A Multivariate Reweighting Method to Produce Balanced Samples in Observational Studies," Political Analysis, Cambridge University Press, vol. 20(1), pages 25-46, January.
    3. Chiou, Tzu-Yun & Chan, Hing Kai & Lettice, Fiona & Chung, Sai Ho, 2011. "The influence of greening the suppliers and green innovation on environmental performance and competitive advantage in Taiwan," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 47(6), pages 822-836.
    4. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    5. Ahmed, Zahoor & Asghar, Muhammad Mansoor & Malik, Muhammad Nasir & Nawaz, Kishwar, 2020. "Moving towards a sustainable environment: The dynamic linkage between natural resources, human capital, urbanization, economic growth, and ecological footprint in China," Resources Policy, Elsevier, vol. 67(C).
    6. Huang, Jun & Han, Feifei & Li, Yun, 2023. "Government as major customer: The effects of government procurement on corporate environmental, social, and governance performance," Finance Research Letters, Elsevier, vol. 54(C).
    7. Zahoor Ahmed & Muhammad Mansoor Asghar & Muhammad Nasir Malik & Kishwar Nawaz, 2020. "Moving towards a sustainable environment: The dynamic linkage between natural resources, human capital, urbanization, economic growth, and ecological footprint in China," Post-Print hal-03557938, HAL.
    8. Kou, Yi & Ye, Qiang & Zhao, Feng & Wang, Xiaolin, 2018. "Effects of investor attention on commodity futures markets," Finance Research Letters, Elsevier, vol. 25(C), pages 190-195.
    9. Sheng, Xin & Guo, Songlin & Chang, Xiaochen, 2022. "Managerial myopia and firm productivity: Evidence from China," Finance Research Letters, Elsevier, vol. 49(C).
    10. Zhi Da & Joseph Engelberg & Pengjie Gao, 2011. "In Search of Attention," Journal of Finance, American Finance Association, vol. 66(5), pages 1461-1499, October.
    11. Paul C. Tetlock, 2011. "All the News That's Fit to Reprint: Do Investors React to Stale Information?," The Review of Financial Studies, Society for Financial Studies, vol. 24(5), pages 1481-1512.
    12. An, Zhe & Chen, Chen & Naiker, Vic & Wang, Jun, 2020. "Does media coverage deter firms from withholding bad news? Evidence from stock price crash risk," Journal of Corporate Finance, Elsevier, vol. 64(C).
    13. Ben Arfi, Wissal & Hikkerova, Lubica & Sahut, Jean-Michel, 2018. "External knowledge sources, green innovation and performance," Technological Forecasting and Social Change, Elsevier, vol. 129(C), pages 210-220.
    14. He, Feng & Yan, Yulin & Hao, Jing & Wu, Ji (George), 2022. "Retail investor attention and corporate green innovation: Evidence from China," Energy Economics, Elsevier, vol. 115(C).
    15. Joon Mahn Lee & Jung Chul Park & Timothy B. Folta, 2018. "CEO career horizon, corporate governance, and real options: The role of economic short‐termism," Strategic Management Journal, Wiley Blackwell, vol. 39(10), pages 2703-2725, October.
    16. Brad M. Barber & Terrance Odean, 2008. "All That Glitters: The Effect of Attention and News on the Buying Behavior of Individual and Institutional Investors," The Review of Financial Studies, Society for Financial Studies, vol. 21(2), pages 785-818, April.
    17. Deng, Chao & Zhou, Xiaoying & Peng, Cheng & Zhu, Huiming, 2022. "Going green: Insight from asymmetric risk spillover between investor attention and pro-environmental investment," Finance Research Letters, Elsevier, vol. 47(PA).
    18. Xiao, Gang & Shen, Sichen, 2022. "To pollute or not to pollute: Political connections and corporate environmental performance," Journal of Corporate Finance, Elsevier, vol. 74(C).
    19. Julia Wolf, 2014. "The Relationship Between Sustainable Supply Chain Management, Stakeholder Pressure and Corporate Sustainability Performance," Journal of Business Ethics, Springer, vol. 119(3), pages 317-328, February.
    20. Zhang, Rongwu & Fu, Wenqiang & Lu, Tong, 2023. "Capital market opening and corporate environmental performance: Empirical evidence from China," Finance Research Letters, Elsevier, vol. 53(C).
    21. Li, Changgui & Liu, Xiaowen & Hou, Zhiping & Li, Yongyi, 2023. "Retail investor attention and equity mispricing: The mediating role of earnings management," Finance Research Letters, Elsevier, vol. 53(C).
    22. Hao, Jing & Xiong, Xiong, 2021. "Retail investor attention and firms' idiosyncratic risk: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 74(C).
    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. Yubo Zhao & Shijing Zhu & Wei Kong & Liang Ren, 2023. "Global Value Chain Position and Corporate Environmental Performance: A Comparison of Domestic and Foreign Perspectives in China," Sustainability, MDPI, vol. 15(11), pages 1-23, May.
    2. Xia, Dehua & Shi, Junfeng, 2024. "Individual investors’ online voice and corporate environmental information disclosure," Finance Research Letters, Elsevier, vol. 62(PB).
    3. Zhang, Jing & Zhang, Lu & Zhang, Mancen, 2024. "Media pressure, internal control, and corporate environmental information disclosure," Finance Research Letters, Elsevier, vol. 63(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. Wen, Bohui & Yan, Yulin & Hao, Jing & He, Feng, 2023. "Investors’ online searching and green knowledge dissemination," Finance Research Letters, Elsevier, vol. 54(C).
    2. He, Feng & Yan, Yulin & Hao, Jing & Wu, Ji (George), 2022. "Retail investor attention and corporate green innovation: Evidence from China," Energy Economics, Elsevier, vol. 115(C).
    3. Gao, Ya & Xiong, Xiong & Feng, Xu & Li, Youwei & Vigne, Samuel A., 2019. "A new attention proxy and order imbalance: Evidence from China," Finance Research Letters, Elsevier, vol. 29(C), pages 411-417.
    4. Goodell, John W. & Kumar, Satish & Li, Xiao & Pattnaik, Debidutta & Sharma, Anuj, 2022. "Foundations and research clusters in investor attention: Evidence from bibliometric and topic modelling analysis," International Review of Economics & Finance, Elsevier, vol. 82(C), pages 511-529.
    5. Zhang, Xiaotao & Li, Guoran & Li, Yishuo & Zou, Gaofeng & Wu, Ji George, 2023. "Which is more important in stock market forecasting: Attention or sentiment?," International Review of Financial Analysis, Elsevier, vol. 89(C).
    6. Huang, Tzu-Lun, 2018. "The puzzling media effect in the Chinese stock market," Pacific-Basin Finance Journal, Elsevier, vol. 49(C), pages 129-146.
    7. Lee, Chien-Chiang & Chen, Mei-Ping, 2021. "The effects of investor attention and policy uncertainties on cross-border country exchange-traded fund returns," International Review of Economics & Finance, Elsevier, vol. 71(C), pages 830-852.
    8. Yung, Kenneth & Nafar, Nadia, 2017. "Investor attention and the expected returns of reits," International Review of Economics & Finance, Elsevier, vol. 48(C), pages 423-439.
    9. Guomei Tang & Xueyong Zhang, 2021. "Media attention to locations and the cross‐section of stock returns," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(S1), pages 2301-2336, April.
    10. Brad M. Barber & Xing Huang & Terrance Odean & Christopher Schwarz, 2022. "Attention‐Induced Trading and Returns: Evidence from Robinhood Users," Journal of Finance, American Finance Association, vol. 77(6), pages 3141-3190, December.
    11. Chen, Rongda & Qian, Qian & Jin, Chenglu & Xu, Min & Song, Qiping, 2020. "Investor attention on internet financial markets," Finance Research Letters, Elsevier, vol. 36(C).
    12. Buehlmaier, Matthias M. M. & Zechner, Josef, 2016. "Financial media, price discovery, and merger arbitrage," CFS Working Paper Series 551, Center for Financial Studies (CFS).
    13. Chen, Yang & Cheng, Liang & Lee, Chien-Chiang, 2022. "How does the use of industrial robots affect the ecological footprint? International evidence," Ecological Economics, Elsevier, vol. 198(C).
    14. Zhang, Ziqi & Su, Zhi & Wang, Ke & Zhang, Yongji, 2022. "Corporate environmental information disclosure and stock price crash risk: Evidence from Chinese listed heavily polluting companies," Energy Economics, Elsevier, vol. 112(C).
    15. He, Feng & Liu, Guanchun & Hao, Jing & Li, Youwei, 2023. "CSR performance and firm idiosyncratic risk in a data-rich environment: The role of retail investor attention," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 89(C).
    16. Ardia, David & Bluteau, Keven & Boudt, Kris, 2022. "Media abnormal tone, earnings announcements, and the stock market," Journal of Financial Markets, Elsevier, vol. 61(C).
    17. Dai, Rui & Ng, Lilian & Zaiats, Nataliya, 2022. "Short seller attention," Journal of Corporate Finance, Elsevier, vol. 72(C).
    18. Liu, Laura Xiaolei & Lu, Ruichang & Sherman, Ann E. & Zhang, Yong, 2023. "IPO underpricing and limited attention: Theory and evidence," Journal of Banking & Finance, Elsevier, vol. 154(C).
    19. Kim, Y. Han (Andy), 2013. "Self attribution bias of the CEO: Evidence from CEO interviews on CNBC," Journal of Banking & Finance, Elsevier, vol. 37(7), pages 2472-2489.
    20. Wenwen Liu & Jinyu Yang & Jingrui Chen & Lei Xu, 2023. "How Social-Network Attention and Sentiment of Investors Affect Commodity Futures Market Returns: New Evidence From China," SAGE Open, , vol. 13(1), pages 21582440231, January.

    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:finlet:v:56:y:2023:i:c:s1544612323005159. 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/frl .

    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.