Research On The Impact Of Environmental Events On Stock Price Of Listed Companies In China

The contradiction between economic development and environmental pollution has been concerned increasingly by all levels of society. The frequent incidents of great environment pollution in recent years have been known to the public, with the rapid spread through internet, which caused many companies in dilemma. Many of the listed company are outstanding, once occurring environmental pollution incidents, will suffer the negative influences and cause a major impact on society, and even promote the development of legislation, such as Environmental Protection Law. In order to effectively strengthen the environmental management, listed companies should reinforce their information disclosure to provide necessary information for shareholders,creditors and potential investors so as to reduce the threat of environmen-tal pollution incident to the enterprises.The share price rising instead of declining after Zijin Mining Group environment-tal pollution incident occurred, the paper studies the influence of pollution incident to the entire mining industry’s share price, researches the correlation between the negative environmental information disclosure and the change of share price in order to analyze whether investors will exert pressure to listed companies through the capital market so as to strengthen the environmental information disclosure of listed companies and environmental protection work.The thesis is divided into four chapters, the first chapter states the background and significance of this paper, pointing out the seriousness of the environmental pollution caused by our enterprises, and the status quo of environmental management. The second chapter reviews the relevant theories of corporate environmental events and market response, and summarizes relevant literature and research results at home and abroad to provide theoretical support for research hypothesis of the Chapter III. The third chapter chooses the influences of share price of Zijin Mining environmental pollution incidents to the whole mining industries as the research subject, and the paper’s empirical analysis uses the event study to make an statistical tests and regress- ion analysis of cumulative irregular rate of return and other factors, to observe the impact on stock price of negative environmental information disclosure to the entire industries. The results show that the negative information disclosure about environm-ental pollution incidents of listed companies in China’s mining industry have short-te-rm negative impact on stock prices, but the impact is not predominant. This indicates that the market response is not sensitive to environmental pollution of heavy pollution enterprises in the extractive industries, and also shows that investors attach less imp-ortance to environmental pollution incidents, but attach great importance to corporate profitability. In Chapter IV, the writer put forward measures and suggestions on how to improve the environmental management of listed companies in extractive industries to improve their economic efficiency and market performance.