| Abstract: |
More and more firms tend nowadays to adopt environment-friendly attitudes.
Their motivation originates in local environmental regulations or requirements
of foreign markets to which firms export (both induced by consumers and
investors´ valuation of pro-environment initiatives). There is a
well-established literature capturing the impact on stock prices of
environmental information releases using the event study methodology. Studies
are usually based on information environmental regulation (i.e., the regulator
announcement of emissions or compliance status with respect to standards) or
on simple media coverage of environmental news. Dasgupta, Laplante and Mamingi
(2001) is one of the few references to show that public information on
environmental behavior has impact on stock prices in the developing world. It
includes Argentina in its analysis together with Chile, Mexico and the
Philippines. In this manuscript, we focus specifically on Argentina. We find
that positive environmental news have no impact, while negative news do have
an effect on average rates of return a few days following its appearance. But,
when focusing on different types of positive news, we find that ISO
certification has no effect whatsoever, while investment decisions do have
some positive significant influence on returns. On the other side, negative
news influence on stock returns is particularly significant for events linked
to citizen complaints and government rulings (confirming other studies
results) and for media coverage of oil company issues. However, we find
abnormal returns of a much smaller magnitude than other studies for developing
countries. We believe that is readonable because there seem to be no reason
why the level of abnormal returns (not its volatility) should be larger for
environmental news in developing countries than in developed ones. |