An Analysis And Relevation On The Market Reaction To The Pollution Incident Of Zhongjin Lingnan Nonfemet Company Limited

As China enjoys her high-speed economic development, environmental hazards begin to appear more and more often. These disasters have not only threatened the sustainable development of the economy in China, but also have posed a huge problem to the daily life of Chinese citizens. Although Zhongjin Lingnan is a flagship company in nonferrous metal industry, the incident hasn't caused any directly-related victims in its thallium pollution, which therefore has reduced the interference caused by the sympathy and the fear of the public, and can truly reflect the actual market reaction more correctly.Using case analysis and event study methods, this paper analyses the change of operating performance, legal liability and financial ability of Zhongjin Lingnan, and thus reveals the underlying causes of the unusual stock price movements and the hidden troubles in the environmental protection system of China. Finally, we reach the conclusion that China needs to enhance her corporation management, improve the environmental information disclosure system, change the rewarding and punishment systems of the local governments, enlarge the scope of protection of the environmental law and strengthen the regulation of the secondary stock market.