Research On Market Response To The Environmental Events Of LUOPING ZINC & ELECTRICITY COMPANY LIMITED

With the tightening of environmental protection supervision,many public companies have been criticized and punished during this round of rectification.Previous studies have revealed that after negative environmental incidents.Companies often experience sharp declines in their stock prices,and their operating conditions were damaged that year.On the day when the negative environmental disclosure event occurs,the company’s response is not significant or even produces a positive response.Regarding what negative environmental information will cause a slump in the company’s stock,Chinese investors are more worried about what non-financial information,and whether our green capital market is operational.This article uses Luoping Zinc and Electric Power Limited Company as an example to analyze the market response of different environmental events using the event research method,select environmental events that occurred in different years in the company,test media exposure,company announcements,and government market disclosure of three different information source events.In addition,the negative environmental information following the same event is also included in the research category,and the impact on different environmental events on the status of the company is judged in combination with Luoping Zinc Power Limited Company’s current financial data and the quality of environmental information disclosure.It is found that the degree of stakeholders’ participation in different environmental events directly affects the external pressure borne by enterprises,and then leads enterprises to take different countermeasures.Among the three environmental events,the environmental events in 2018 had an impact on the business status and information disclosure quality of the enterprise,but the environmental punishment had little impact on the business status of the enterprise.It is found that the negative market reaction caused by the exposure of environmental pollution by the media lasts for a short time,while the information disclosure violations and government public criticism events announced by the company last for a long time.Further research on the follow-up response of the government’s public criticism events,respectively test the market response of the secondary media reports,administrative penalties,environmental protection litigation and investor litigation events.It is found that Chinese investors pay more attention to corporate performance information,pay less attention to social responsibility information,whether negative environmental information produces significant market response is related to whether information affects corporate performance.The results show that the second exposure event has a positive market response,the administrative punishment event has apositive market response because the punishment is less than the expectation of investors,the market response of environmental protection litigation event is not significant,and the investor litigation effect has a significant negative market response.These conclusions can provide useful reference for government departments to formulate environmental protection policies and measures.