Market Reaction To Environmental Accidents In The Pharmaceutical Industry

With the acceleration of the industrialization process,environmental pollution is becoming more and more serious,and ecological and environmental problems have gradually aroused widespread concern in society.As a developing country,China's environmental pollution is mainly caused by the extensive production of manufacturing enterprises,the frequent exposure of environmental pollution accidents has made the public have an urgent need for the environmental activities of enterprises.In this context,the academic community began to introduce environmental accounting theory,and the regulatory authorities also strengthened the requirements for corporate environmental information disclosure.However,since the company's business objectives are to maximize profits,environmental governance and information disclosure require a certain amount of cost,which makes Listed companies lack the enthusiasm and voluntariness of environmental information disclosure.The pharmaceutical manufacturing industry(referred to as the pharmaceutical industry in full text)is one of the 16 major polluting industries under the supervision of the Ministry of Environmental Protection,its rapid development has caused an irreversible impact on the ecological environment.According to the statistical research on the environmental information released by the 172 heavily polluting industries of the Shanghai Stock Exchange in 2017 by the Environmental Economic Research Center of Fudan University,compared with other heavily polluting industries,the environmental information disclosure scores of the pharmaceutical industry are significantly lower,and its pollution control and information disclosure needs to be strengthened.In summary,the pharmaceutical industry has the characteristics of "fast development,heavy pollution,and poor disclosure".Therefore,this paper takes the pharmaceutical industry as the research object,and tries to guide enterprises to formulate long-term environmental strategies and enhance the enthusiasm and initiative of environmental protection and information disclosure in the pharmaceutical industry.Based on the background of severe environmental pollution,starting from the environmental pollution accidents in the pharmaceutical industry,on the one hand,the paper discussed the negative impact of major pollution accidents on the enterprises involved by taking Haizheng Pharmaceutical which is a leading company of the pharmaceutical industry in Zhejiang Province as an example.The paper had selected two typical events to analyze the stock price fluctuations of Haizheng Pharmaceutical after the accident;then,the main reasons for the different degree of influence were found out,it was found that the quality of environmental information disclosure can inhibit the negative impact of environmental accidents on the enterprises in a certain degree.On the other hand,the paper tested the negative impact of major pollution accidents on enterprises in the same industry based on the two major environmental accidents in the pharmaceutical industry in recent years.40 sample companies in the industry were selected as research objects,and the industry spillover effect of environmental accidents was verified by the practice research method,and it was tested whether environmental information disclosure has an inhibitory effect on industry spillover effects by multiple linear regression.This paper finds that the occurrence of environmental accidents will cause negative market reaction for the enterprises through case study.At the same time,high-quality environmental information disclosure can inhibit the negative impact of environmental accidents on the industry in a certain degree.After the case study,we extended the research perspective from the enterprise to the industry level,this paper finds that the market impact of environmental accidents has industry spillover effects through empirical tests,because environmental risks are the common characteristics of all pharmaceutical companies,the exposure of a major pollution accident of a certain enterprise has an negative impact on the stock market of the entire industry;In addition,the stock with a high level of environmental information disclosure in the previous year is also significantly negatively affected.That is,high-quality environmental information disclosure cannot inhibit industry spillovers,the main reason is that China has not established a sound environmental information disclosure system,the quality of information disclosure in the pharmaceutical industry is uneven and lacks of comparability,which makes investors less sensitive to the environmental information of enterprises.Finally,this paper proposed corresponding policy recommendations based on the research results:the government should improve laws and regulations on environmental information disclosure,establish environmental accounting standards,and increase the punishment of environmental violations;enterprises should be aware of the dangers of environmental accidents,look at the relationship between environmental protection and business management in a long-term perspective,consciously carry out pollution control and proactively disclose environmental information.