IDEAS home Printed from https://ideas.repec.org/a/eee/foreco/v17y2011i4p388-398.html
   My bibliography  Save this article

Effects of litigation under the Endangered Species Act on forest firm values

Author

Listed:
  • Sun, Changyou
  • Liao, Xianchun

Abstract

The Endangered Species Act (ESA) has been a source of litigation and subject to court interpretation during the past several decades. In this study, event analysis was employed to examine the impact of six court decisions related to the ESA on the financial performance of U.S. forest products firms. The finding of abnormal returns revealed that all six events generated the expected positive or negative returns, and among them, four were statistically significant. Changes in systematic risk reflected the reaction of the stock market to the verdict announcements. Programs designed for habitat conservation can be implemented to compensate private landowners or firms for costs associated with protecting species on private forestlands.

Suggested Citation

  • Sun, Changyou & Liao, Xianchun, 2011. "Effects of litigation under the Endangered Species Act on forest firm values," Journal of Forest Economics, Elsevier, vol. 17(4), pages 388-398.
    • Handle: RePEc:eee:foreco:v:17:y:2011:i:4:p:388-398
    DOI: 10.1016/j.jfe.2011.03.004
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1104689911000328
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jfe.2011.03.004?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. Brian C. Murray & David N. Wear, 1998. "Federal Timber Restrictions and Interregional Arbitrage in U.S. Lumber," Land Economics, University of Wisconsin Press, vol. 74(1), pages 76-91.
    2. Jensen, Michael C, 1969. "Risk, The Pricing of Capital Assets, and the Evaluation of Investment Portfolios," The Journal of Business, University of Chicago Press, vol. 42(2), pages 167-247, April.
    3. Daowei Zhang & Warren A. Flick, 2001. "Sticks, Carrots, and Reforestation Investment," Land Economics, University of Wisconsin Press, vol. 77(3), pages 443-456.
    4. Binder, John J, 1998. "The Event Study Methodology since 1969," Review of Quantitative Finance and Accounting, Springer, vol. 11(2), pages 111-137, September.
    5. Sayeed R. Mehmood & Daowei Zhang, 2001. "A Roll Call Analysis of the Endangered Species Act Amendments," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(3), pages 501-512.
    6. Brown, Stephen J. & Warner, Jerold B., 1985. "Using daily stock returns : The case of event studies," Journal of Financial Economics, Elsevier, vol. 14(1), pages 3-31, March.
    7. Randal R. Rucker & Walter N. Thurman & Jonathan K. Yoder, 2005. "Estimating the Structure of Market Reaction to News: Information Events and Lumber Futures Prices," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(2), pages 482-500.
    8. Mei, Bin & Sun, Changyou, 2008. "Event analysis of the impact of mergers and acquisitions on the financial performance of the U.S. forest products industry," Forest Policy and Economics, Elsevier, vol. 10(5), pages 286-294, April.
    9. Niquidet, Kurt, 2008. "Revitalized? An event study of forest policy reform in British Columbia," Journal of Forest Economics, Elsevier, vol. 14(4), pages 227-241, November.
    10. A. Craig MacKinlay, 1997. "Event Studies in Economics and Finance," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 13-39, 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. Daniel Martin Katz & Michael J Bommarito II & Tyler Soellinger & James Ming Chen, 2015. "Law on the Market? Abnormal Stock Returns and Supreme Court Decision-Making," Papers 1508.05751, arXiv.org, revised May 2017.
    2. Tingting Zhang & Shunbo Yao & Jinna Yu & Assem Abu Hatab & Zhen Liu, 2020. "Effects of China’s Collective Forestland Tenure Reform Policies on Forest Product Firm Values," Land, MDPI, vol. 9(4), pages 1-20, April.

    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. Ståle Størdal & Gudbrand Lien & Erik Trømborg, 2021. "Impacts of Infectious Disease Outbreaks on Firm Performance and Risk: The Forest Industries during the COVID-19 Pandemic," JRFM, MDPI, vol. 14(7), pages 1-13, July.
    2. Sun, Xing & Zhang, Daowei, 2011. "An event analysis of industrial timberland sales on shareholder values of major U.S. forest products firms," Forest Policy and Economics, Elsevier, vol. 13(5), pages 396-401, June.
    3. Niquidet, Kurt, 2008. "Revitalized? An event study of forest policy reform in British Columbia," Journal of Forest Economics, Elsevier, vol. 14(4), pages 227-241, November.
    4. Chia-Lin Chang & Shu-Han Hsu & Michael McAleer, 2018. "An Event Study Analysis of Political Events, Disasters, and Accidents for Chinese Tourists to Taiwan," Sustainability, MDPI, vol. 10(11), pages 1-77, November.
    5. Sebastien Bradley & Estelle Dauchy & Makoto Hasegawa, 2018. "Investor valuations of Japan’s adoption of a territorial tax regime: quantifying the direct and competitive effects of international tax reform," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 25(3), pages 581-630, June.
    6. Demirer, RIza & Kutan, Ali M., 2010. "The behavior of crude oil spot and futures prices around OPEC and SPR announcements: An event study perspective," Energy Economics, Elsevier, vol. 32(6), pages 1467-1476, November.
    7. Xu, Mingli & Yang, Wei & Huang, Zhixiong, 2021. "Do investor relations matter in the tourism industry? Evidence from public opinions in China," Economic Modelling, Elsevier, vol. 94(C), pages 923-933.
    8. Furdui Călin & Șfabu Dorina Teodora, 2023. "The European Banks Under the Shock of the Russian Invasion of 2022: An Event Study Approach," Studia Universitatis Babeș-Bolyai Oeconomica, Sciendo, vol. 68(1), pages 62-77, April.
    9. Capelle-Blancard, Gunther & Couderc, Nicolas, 2008. "What drives the market value of firms in the defense industry," Review of Financial Economics, Elsevier, vol. 17(1), pages 14-32.
    10. Omer Ahmed Sayed & Hussein Eledum, 2023. "The short‐run response of Saudi Arabia stock market to the outbreak of COVID‐19 pandemic: An event‐study methodology," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(3), pages 2367-2381, July.
    11. Wang, Zhixuan & Dong, Yanli & Liu, Ailan, 2022. "How does China's stock market react to supply chain disruptions from COVID-19?," International Review of Financial Analysis, Elsevier, vol. 82(C).
    12. Ahmad H. Juma’h & Yazan Alnsour, 2018. "Using Social Media Analytics: The Effect of President Trump’s Tweets On Companies’ Performance," Journal of Accounting and Management Information Systems, Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies, vol. 17(1), pages 100-121, March.
    13. Yan Zeng & Josie McLaren, 2015. "The impact of large public sales of Government assets: empirical evidence from the Chinese stock markets on a gradual and offer-to-get approach," Review of Quantitative Finance and Accounting, Springer, vol. 45(1), pages 137-173, July.
    14. Pedro Antonio González & José Luis Gallizo, 2021. "Impact of COVID-19 on the Stock Market by Industrial Sector in Chile: An Adverse Overreaction," JRFM, MDPI, vol. 14(11), pages 1-24, November.
    15. Fitriya Fauzi & Dani Foo & Abdul Basyith, 2017. "Islamic Bond Announcement: Is There Any Effect on Returns?," Global Business Review, International Management Institute, vol. 18(2), pages 327-347, April.
    16. Kiesel, Florian & Ries, Jörg M. & Tielmann, Artur, 2017. "Reprint of “The impact of mergers and acquisitions on shareholders' wealth in the logistics service industry”," International Journal of Production Economics, Elsevier, vol. 194(C), pages 261-277.
    17. Bogdan Capraru & Iulian Ihnatov & Nicu Sprincean, 2016. "The Effect Of Major Events On Bank Share Price In Romania," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 747-757, July.
    18. Abraham Park & Chen Yu Chang, 2013. "Impacts of Construction Events on the Project Equity Value of the Channel Tunnel Project," ERES eres2013_97, European Real Estate Society (ERES).
    19. Pushpanjali Kaul & Sangeeta Arora, 2022. "Reinventing a brand’s identity: effect of name and logo announcements on the stock price of Indian banks," Journal of Brand Management, Palgrave Macmillan, vol. 29(3), pages 258-270, May.
    20. Ralf Schremper, 2003. "Kapitalmarktrelevanz deutscher Aktienrückkaufprogramme," Schmalenbach Journal of Business Research, Springer, vol. 55(6), pages 578-605, September.

    More about this item

    Keywords

    Abnormal return; Capital Asset Pricing Model; Litigation; Risk;
    All these keywords.

    JEL classification:

    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry

    Statistics

    Access and download statistics

    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:foreco:v:17:y:2011:i:4:p:388-398. 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/wps/find/journaldescription.cws_home/701775/description#description .

    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.