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Corporate Environmental Initiatives and Shareholder Value: Focusing on the Role of Environmental Information and Its Credibility

Author

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  • Kimitaka Nishitani

    (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan)

  • Katsuhiko Kokubu

    (Graduate School of Business Administration, Kobe University)

Abstract

The goal of this paper is to perform an empirical analysis on the impact on shareholder value of corporate environmental initiatives, focusing on the environmental disclosure and its credibility. The authors verified their hypothesis regarding this, which states, "corporations' environmental initiatives improve shareholder value via release of environmental reports. This trend grows stronger when the credibility of the disclosed information is enhanced." The results of the empirical analysis supported this hypothesis. Specifically, it was revealed that corporations that conduct more environmental initiatives release more environmental reports, and corporations that release more environmental reports have higher shareholder value, and the increased credibility gained via the disclosure of information that includes third-party reviews strengthens this trend even further.

Suggested Citation

  • Kimitaka Nishitani & Katsuhiko Kokubu, 2014. "Corporate Environmental Initiatives and Shareholder Value: Focusing on the Role of Environmental Information and Its Credibility," Discussion Paper Series DP2014-34, Research Institute for Economics & Business Administration, Kobe University.
    • Handle: RePEc:kob:dpaper:dp2014-34
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    References listed on IDEAS

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    Keywords

    Environmental Disclosures; Environmental Initiatives; Economic Performance; Improvement in Productivity; Increase in Demand; Fixed Effects Instrumental Variables Model;
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