The Effects of Environmental Regulation on Corporate Performance: A Chinese Perspective

42 Pages Posted: 30 Aug 2012

See all articles by Vikash Ramiah

Vikash Ramiah

Royal Melbourne Institute of Technolog (RMIT University) - School of Economics, Finance and Marketing; Financial Research Network (FIRN)

Jacopo Pichelli

Polytechnic University of Milan

Imad Moosa

Royal Melbourne Institute of Technolog (RMIT University); Financial Research Network (FIRN)

Date Written: August 29, 2012

Abstract

This paper presents empirical evidence on the effects of environmental regulation announcements on corporate performance in China when performance is proxied by stock returns. While some results indicate the effectiveness of environmental regulation, others point to the opposite. The perverse results are explained in terms of the lack of enforcement of environmental regulation, which is attributed to legislative shortcomings, poorly designed policy instruments, an unsupportive work environment for environmental regulators, a pro-growth political and social environment, and a cultural predisposition to harmony and consensus-building among those involved in the process.

Keywords: Environmental Regulation, Event Study, Abnormal Returns, Systematic Risk

JEL Classification: G1, G11, H56

Suggested Citation

Ramiah, Vikash and Pichelli, Jacopo and Moosa, Imad, The Effects of Environmental Regulation on Corporate Performance: A Chinese Perspective (August 29, 2012). Midwest Finance Association 2013 Annual Meeting Paper, Available at SSRN: https://ssrn.com/abstract=2138091 or http://dx.doi.org/10.2139/ssrn.2138091

Vikash Ramiah (Contact Author)

Royal Melbourne Institute of Technolog (RMIT University) - School of Economics, Finance and Marketing ( email )

Business
Level 12, 239 Bourke Street
Melbourne, Victoria 3000
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Jacopo Pichelli

Polytechnic University of Milan ( email )

Dipartimento di Ingegneria Gestionale
via Lambruschini 4/b
Milan, MI mil 4
Italy

Imad Moosa

Royal Melbourne Institute of Technolog (RMIT University) ( email )

124 La Trobe Street
Melbourne, 3000
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

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