IDEAS home Printed from https://ideas.repec.org/p/ecl/stabus/1651.html
   My bibliography  Save this paper

Pollution Prevention as Innovation? Measuring the Long Run Stock Performance

Author

Listed:
  • Arora, Seema

    (Stanford U and Vanderbilt U)

Abstract

We examine whether pollution prevention actions result in innovation. Since a change in the product or process is not instantaneous, we compute the buy and hold returns for the long run to capture the gains due to innovation. We compare the stock market performances for firms that reported pollution prevention efforts with firms that do not report such efforts. Our results indicate that firms that engage in prevention efforts consistently outperform firms that do not engage in such efforts. Our paper is the first systematic effort to measure the private benefits due to pollution prevention activities.

Suggested Citation

  • Arora, Seema, 2000. "Pollution Prevention as Innovation? Measuring the Long Run Stock Performance," Research Papers 1651, Stanford University, Graduate School of Business.
  • Handle: RePEc:ecl:stabus:1651
    as

    Download full text from publisher

    File URL: http://gsbapps.stanford.edu/researchpapers/library/RP1651.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Arora Seema & Cason Timothy N., 1995. "An Experiment in Voluntary Environmental Regulation: Participation in EPA's 33/50 Program," Journal of Environmental Economics and Management, Elsevier, vol. 28(3), pages 271-286, May.
    2. Huang, Roger D. & Stoll, Hans R., 1996. "Dealer versus auction markets: A paired comparison of execution costs on NASDAQ and the NYSE," Journal of Financial Economics, Elsevier, vol. 41(3), pages 313-357, July.
    3. Barber, Brad M. & Lyon, John D., 1997. "Detecting long-run abnormal stock returns: The empirical power and specification of test statistics," Journal of Financial Economics, Elsevier, vol. 43(3), pages 341-372, March.
    4. Arora, Seema, 2000. "Green and Competitive? Evidence from the Stock Market," Research Papers 1650, Stanford University, Graduate School of Business.
    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. Seema Arora & Timothy N. Cason, 1996. "Why Do Firms Volunteer to Exceed Environmental Regulations? Understanding Participation in EPA's 33/50 Program," Land Economics, University of Wisconsin Press, vol. 72(4), pages 413-432.
    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. Arora, Seema, 2000. "Green and Competitive? Evidence from the Stock Market," Research Papers 1650, Stanford University, Graduate School of Business.
    2. Madhu Khanna, 2001. "Non‐Mandatory Approaches to Environmental Protection," Journal of Economic Surveys, Wiley Blackwell, vol. 15(3), pages 291-324, July.
    3. Cole, Matthew A. & Elliott, Robert J.R. & Khemmarat, Khemrutai, 2013. "Local exposure to toxic releases: Examining the role of ethnic fractionalization and polarisation," Ecological Economics, Elsevier, vol. 93(C), pages 249-259.
    4. Innes, Robert & Sam, Abdoul G., 2003. "Voluntary Pollution Abatement: Testing Alternative Theories," 2003 Annual meeting, July 27-30, Montreal, Canada 21945, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Facundo Albornoz & Matthew A. Cole & Robert J. R. Elliott & Marco G. Ercolani, 2009. "In Search of Environmental Spillovers," The World Economy, Wiley Blackwell, vol. 32(1), pages 136-163, January.
    6. Ziegler, Andreas & Schröder, Michael, 2006. "What Determines the Inclusion in a Sustainability Stock Index? A Panel Data Analysis for European Companies," ZEW Discussion Papers 06-041, ZEW - Leibniz Centre for European Economic Research.
    7. Afsah, Shakeb & Blackman, Allen & Ratunanda, Damayanti, 2000. "How Do Public Disclosure Pollution Control Programs Work? Evidence from Indonesia," Discussion Papers 10515, Resources for the Future.
    8. Saha, Shrawantee & Mohr, Robert D., 2013. "Media attention and the Toxics Release Inventory," Ecological Economics, Elsevier, vol. 93(C), pages 284-291.
    9. Tommy Lundgren, 2003. "A Real Options Approach to Abatement Investments and Green Goodwill," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 25(1), pages 17-31, May.
    10. Dietrich Earnhart & Lubomir Lizal, 2007. "Does Better Environmental Performance Affect Revenues, Cost, or Both? Evidence From a Transition Economy," William Davidson Institute Working Papers Series wp856, William Davidson Institute at the University of Michigan.
    11. Stefan Ambec & Paul Lanoie, 2007. "When and Why Does It Pay To Be Green?," CIRANO Working Papers 2007s-20, CIRANO.
    12. Susan A. Kayser & John W. Maxwell & Michael W. Toffel, 2014. "Supply chain screening without certification: The critical role of stakeholder pressure," Working Papers 2014-08, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
    13. Bengt Kristrom & Tommy Lundgren, 2003. "Abatement investments and green goodwill," Applied Economics, Taylor & Francis Journals, vol. 35(18), pages 1915-1921.
    14. Bjorner, Thomas Bue & Hansen, L.G.Lars Garn & Russell, Clifford S., 2004. "Environmental labeling and consumers' choice--an empirical analysis of the effect of the Nordic Swan," Journal of Environmental Economics and Management, Elsevier, vol. 47(3), pages 411-434, May.
    15. Roeland Bracke & Tom Verbeke, 2007. "What Distinguishes EMAS Participants? An Exploration of Company Characteristics," Working Papers 2007.37, Fondazione Eni Enrico Mattei.
    16. Gangadharan, Lata, 2006. "Environmental compliance by firms in the manufacturing sector in Mexico," Ecological Economics, Elsevier, vol. 59(4), pages 477-486, October.
    17. Anton, W.R.Q.Wilma Rose Q. & Deltas, George & Khanna, Madhu, 2004. "Incentives for environmental self-regulation and implications for environmental performance," Journal of Environmental Economics and Management, Elsevier, vol. 48(1), pages 632-654, July.
    18. Yu Matsuno, 2007. "Pollution control agreements in Japan: conditions for their success," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 8(2), pages 103-141, June.
    19. Aggarwal, Reena & Angel, James J., 1999. "The rise and fall of the Amex Emerging Company Marketplace," Journal of Financial Economics, Elsevier, vol. 52(2), pages 257-289, May.
    20. Shimshack, Jay P. & Ward, Michael B., 2008. "Enforcement and over-compliance," Journal of Environmental Economics and Management, Elsevier, vol. 55(1), pages 90-105, January.

    More about this item

    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:ecl:stabus:1651. 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: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/gsstaus.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.