IDEAS home Printed from https://ideas.repec.org/p/awi/wpaper/0524.html
   My bibliography  Save this paper

On the Obligation to Provide Environmental Information in the 21st Century – Empirical Evidence from Germany

Author

Listed:
  • Massier, Philipp
  • Römer, Daniel

Abstract

In this paper, we study the effectiveness of environmental information disclosure as a regulatory instrument. In particular we analyze its impact when environmental regulation is already advanced. Using German stock market data, we are able to identify the impact of the European Pollutant Emission Register (EPER) on the market value of listed firms using a Multivariate Regression Model (MVRM). First, we show that the publication of EPER data leads to negative abnormal returns of the respective listed firms in Germany. Second, we study drivers of these abnormal returns. Here, we find that the firms' individual level of non-carbon emissions can explain the observed changes in market valuation, while carbon dioxide emissions do not seem to be punished by the market. Moreover, we include information on voluntarily provided environmental reports and find that these reports can serve as a substitute to the obligatory register.

Suggested Citation

  • Massier, Philipp & Römer, Daniel, 2012. "On the Obligation to Provide Environmental Information in the 21st Century – Empirical Evidence from Germany," Working Papers 0524, University of Heidelberg, Department of Economics.
    • Handle: RePEc:awi:wpaper:0524
    Note: This paper is part of http://archiv.ub.uni-heidelberg.de/volltextserver/view/schriftenreihen/sr-3.html
    as

    Download full text from publisher

    File URL: http://nbn-resolving.de/urn/resolver.pl?urn=urn:nbn:de:bsz:16-opus-131697
    File Function: Frontdoor page on HeiDOK
    Download Restriction: no
    File URL: https://archiv.ub.uni-heidelberg.de/volltextserver/13169/1/Massier_Roemer_2012_dp524.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Khanna, Madhu & Quimio, Wilma Rose H. & Bojilova, Dora, 1998. "Toxics Release Information: A Policy Tool for Environmental Protection," Journal of Environmental Economics and Management, Elsevier, vol. 36(3), pages 243-266, November.
    2. Andrew A. King & Michael J. Lenox, 2001. "Does It Really Pay to Be Green? An Empirical Study of Firm Environmental and Financial Performance: An Empirical Study of Firm Environmental and Financial Performance," Journal of Industrial Ecology, Yale University, vol. 5(1), pages 105-116, January.
    3. Blackman, Allen & Afsah, Shakeb & Ratunanda, Damayanti, 2000. "How Do Public Disclosure Pollution Control Programs Work? Evidence from Indonesia," RFF Working Paper Series dp-00-44, Resources for the Future.
    4. Lanoie, Paul & Laplante, Benoit & Roy, Maite, 1998. "Can capital markets create incentives for pollution control?," Ecological Economics, Elsevier, vol. 26(1), pages 31-41, July.
    5. Hamilton James T., 1995. "Pollution as News: Media and Stock Market Reactions to the Toxics Release Inventory Data," Journal of Environmental Economics and Management, Elsevier, vol. 28(1), pages 98-113, January.
    6. Akira Hibiki & Shunsuke Managi, 2010. "Environmental Information Provision, Market Valuation, and Firm Incentives: An Empirical Study of the Japanese PRTR System," Land Economics, University of Wisconsin Press, vol. 86(2), pages 382-393.
    7. Fama, Eugene F, et al, 1969. "The Adjustment of Stock Prices to New Information," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 10(1), pages 1-21, February.
    8. Paul J. Ferraro & Toshihiro Uchida, 2007. "Stock market reactions to information disclosure: new evidence from Japan’s pollutant release and transfer register," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 8(2), pages 159-171, June.
    9. Cañón-de-Francia, Joaquín & Garcés-Ayerbe, Concepción & Ramírez-Alesón, Marisa, 2008. "Analysis of the effectiveness of the first European Pollutant Emission Register (EPER)," Ecological Economics, Elsevier, vol. 67(1), pages 83-92, August.
    10. 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.
    11. Tom Tietenberg, 1998. "Disclosure Strategies for Pollution Control," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 11(3), pages 587-602, April.
    12. Brown, Stephen J. & Warner, Jerold B., 1980. "Measuring security price performance," Journal of Financial Economics, Elsevier, vol. 8(3), pages 205-258, September.
    13. Andy Gouldson & Rory Sullivan, 2007. "Corporate environmentalism: tracing the links between policies and performance using corporate reports and public registers," Business Strategy and the Environment, Wiley Blackwell, vol. 16(1), pages 1-11, January.
    Full references (including those not matched with items on IDEAS)

    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. Cañón-de-Francia, Joaquín & Garcés-Ayerbe, Concepción & Ramírez-Alesón, Marisa, 2008. "Analysis of the effectiveness of the first European Pollutant Emission Register (EPER)," Ecological Economics, Elsevier, vol. 67(1), pages 83-92, August.
    2. Stefan Ambec & Paul Lanoie, 2007. "When and Why Does It Pay To Be Green?," CIRANO Working Papers 2007s-20, CIRANO.
    3. Garcia, Jorge H. & Afsah, Shakeb & Sterner, Thomas, 2008. "What Kinds of Firms Are More Sensitive to Public Disclosure Programs for Pollution Control? The Case of Indonesia’s PROPER Program," RFF Working Paper Series dp-08-12-efd, Resources for the Future.
    4. García, Jorge H. & Sterner, Thomas & Afsah, Shakeb, 2007. "Public disclosure of industrial pollution: the PROPER approach for Indonesia?," Environment and Development Economics, Cambridge University Press, vol. 12(6), pages 739-756, December.
    5. Jin, Yanhong & Wang, Hua & Wheeler, David, 2010. "Environmental performance rating and disclosure : an empirical investigation of China's green watch program," Policy Research Working Paper Series 5420, The World Bank.
    6. Tang, John P., 2015. "Pollution havens and the trade in toxic chemicals: Evidence from U.S. trade flows," Ecological Economics, Elsevier, vol. 112(C), pages 150-160.
    7. Managi, Shunsuke & Okimoto, Tatsuyoshi & Matsuda, Akimi, 2012. "Do Socially Responsible Investment Indexes Outperform Conventional Indexes?," MPRA Paper 36662, University Library of Munich, Germany.
    8. Bennear, Lori S. & Olmstead, Sheila M., 2008. "The impacts of the "right to know": Information disclosure and the violation of drinking water standards," Journal of Environmental Economics and Management, Elsevier, vol. 56(2), pages 117-130, September.
    9. Oberndorfer, Ulrich & Schmidt, Peter & Wagner, Marcus & Ziegler, Andreas, 2013. "Does the stock market value the inclusion in a sustainability stock index? An event study analysis for German firms," Journal of Environmental Economics and Management, Elsevier, vol. 66(3), pages 497-509.
    10. André, Francisco J. & Sokri, Abderrahmane & Zaccour, Georges, 2011. "Public Disclosure Programs vs. traditional approaches for environmental regulation: Green goodwill and the policies of the firm," European Journal of Operational Research, Elsevier, vol. 212(1), pages 199-212, July.
    11. Kathuria, Vinish, 2007. "Informal regulation of pollution in a developing country: Evidence from India," Ecological Economics, Elsevier, vol. 63(2-3), pages 403-417, August.
    12. Madhu Khanna, 2001. "Non‐Mandatory Approaches to Environmental Protection," Journal of Economic Surveys, Wiley Blackwell, vol. 15(3), pages 291-324, July.
    13. Lori Bennear & Alessandro Tarozzi & Alexander Pfaff & H. B. Soumya & Kazi Matin Ahmed & Alexander van Geen, 2010. "Bright Lines, Risk Beliefs, and Risk Avoidance: Evidence from a Randomized Intervention in Bangladesh," Working Papers 10-77, Duke University, Department of Economics.
    14. Hyunhoe Bae & Peter Wilcoxen & David Popp, 2010. "Information disclosure policy: Do state data processing efforts help more than the information disclosure itself?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 29(1), pages 163-182.
    15. Fischer, Carolyn & Parry, Ian W.H. & Aguilar, Francisco X. & Jawahar, Puja, 2005. "Corporate Codes of Conduct: Is Common Environmental Content Feasible?," Discussion Papers 10889, Resources for the Future.
    16. Yassin Denis Bouzzine & Rainer Lueg, 2020. "The contagion effect of environmental violations: The case of Dieselgate in Germany," Business Strategy and the Environment, Wiley Blackwell, vol. 29(8), pages 3187-3202, December.
    17. Jin, Yanhong & Wang, Hua & Wheeler, David, 2010. "The impact of environmental performance rating and disclosure: an empirical analysis of perceptions by polluting firms'managers in China," Policy Research Working Paper Series 5419, The World Bank.
    18. Blackman, Allen, 2009. "Alternative Pollution Control Policies in Developing Countries: Informal, Informational, and Voluntary," RFF Working Paper Series dp-09-10, Resources for the Future.
    19. Capelle-Blancard, Gunther & Laguna, Marie-Aude, 2010. "How does the stock market respond to chemical disasters?," Journal of Environmental Economics and Management, Elsevier, vol. 59(2), pages 192-205, March.
    20. Claudia Poser & Edeltraud Guenther & Marc Orlitzky, 2012. "Shades of green: using computer-aided qualitative data analysis to explore different aspects of corporate environmental performance," Metrika: International Journal for Theoretical and Applied Statistics, Springer, vol. 22(4), pages 413-450, January.

    More about this item

    Keywords

    information disclosure; EPER; event study; environmental reports;
    All these keywords.

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:awi:wpaper:0524. 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: Gabi Rauscher (email available below). General contact details of provider: https://edirc.repec.org/data/awheide.html .

    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.