ABSTRACT
We study how the stock market in China responds to announcements by an environmental risk index and find that China’s stock market penalizes firms associated with unfavourable environmental news if the information is provided directly to investors in a manner that is easily understood. We also find that the negative impact on stock prices fades after multiple disclosures of the same information.
Disclosure statement
No potential conflict of interest was reported by the authors.
Notes
1 Contrary to government policies, the list we use is published by private institutions and the public has little advance knowledge of its contents before it is announced. Considering this, we choose the estimation window of (−11, −250) rather than the usual (−31, −280) or earlier ones.