Abstract
This research documents that automotive firms’ failures to meet environmental standards are associated with a statistically significant negative stock market reaction. The results are based on a sample of 41 environmental standards failure announcements made from 1984 to 2016. On the days of the announcements, there was a mean stock market reaction of -1.02%, with 61% of sample firms experiencing a negative reaction. There is no difference in stock reaction for firms that fail to meet voluntary standards. If the firms offer compensation as a remedy for the failure, this results in a more negative stock market reaction. While the impact of failures has, in general, been associated with a more positive stock market reaction in more recent years, events occurring following the Volkswagen Dieselgate event are associated with a more negative stock market reaction.
| Original language | English |
|---|---|
| Title of host publication | Proceedings of 15th ANZAM Operations, Supply Chain and Services Management Symposium |
| Subtitle of host publication | Value adding role of operations and supply chain management for firms and the society |
| Editors | Pavel Castka, Mark Wilson, Mesbahuddin Chowdhury |
| Publisher | Lincoln University, New Zealand |
| Pages | 305-324 |
| Number of pages | 20 |
| ISBN (Electronic) | 047340205X |
| ISBN (Print) | 9780473402051 |
| Publication status | Published - 13 Jun 2017 |
| Externally published | Yes |
| Event | 15th ANZAM Operations, Supply Chain and Services Management Symposium: Value adding role of operations and supply chain management for firms and the society - Queenstown, New Zealand Duration: 13 Jun 2017 → 14 Jun 2017 Conference number: 15 |
Conference
| Conference | 15th ANZAM Operations, Supply Chain and Services Management Symposium |
|---|---|
| Abbreviated title | ANZAM 2017 |
| Country/Territory | New Zealand |
| City | Queenstown |
| Period | 13/06/17 → 14/06/17 |
