Abstract

The environmental performance of a listed firm could affect its level of investment in pollution prevention and its access to financial markets. Previous studies using Tobin's q that explore market response to environmental performance do not distinguish between the impact of performance on investment and market response, which may mislead conclusions. To overcome this problem, we simultaneously estimate the functions of the intangible asset, the replacement cost, and the toxic chemical risk. We find that the Japanese financial market does not value risk associated with toxic chemical releases. Nevertheless, even without market valuation, firms increase investment to reduce pollution.

pdf

Additional Information

ISSN
1543-8325
Print ISSN
0023-7639
Pages
pp. 382-393
Launched on MUSE
2012-04-04
Open Access
No
Back To Top

This website uses cookies to ensure you get the best experience on our website. Without cookies your experience may not be seamless.