Do investors react to environmental friendly news? An analysis for Spanish capital market

Francisco J. Callado-Muñoz; Natalia Utrero-González

Do investors react to environmental friendly news? An analysis for Spanish capital market

Francisco J. Callado-Muñoz, Natalia Utrero-González

Research output: Contribution to journal › Article › Research › peer-review

Abstract

This work adds to the recent debate in corporate social responsibility (CSR) and its effects on performance and firm value. By analysing Spanish companies participating in the IBEX-35 stock- exchange index, this paper empirically tests whether there is a significant price reaction to environmental friendly announcements. Using event studies methodology, the distinction among sectors allows for a better understanding of investors reaction. Results show first, that investors do act in response to this kind of practices and second, that the sign of their reaction depends crucially on the business of the firm and the sector where it operates. In this sense, results may help in reconciling the opposite views regarding the effects of CSR policies.

Original language	English
Pages (from-to)	315-321
Journal	Corporate Ownership and Control
Volume	5
Issue number	2 C CONT. 2
Publication status	Published - 1 Jan 2008

Keywords

Corporate social responsibility
Event studies

UN SDGs

This output contributes to the following Sustainable Development Goal(s)

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AB - This work adds to the recent debate in corporate social responsibility (CSR) and its effects on performance and firm value. By analysing Spanish companies participating in the IBEX-35 stock- exchange index, this paper empirically tests whether there is a significant price reaction to environmental friendly announcements. Using event studies methodology, the distinction among sectors allows for a better understanding of investors reaction. Results show first, that investors do act in response to this kind of practices and second, that the sign of their reaction depends crucially on the business of the firm and the sector where it operates. In this sense, results may help in reconciling the opposite views regarding the effects of CSR policies.

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