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Going Green: Market Reaction to CSR Newswire Releases

Posted: 30 Jan 2012 Last revised: 24 Oct 2015

Paul A. Griffin

University of California, Davis - Graduate School of Management; University of California, Davis

Estelle Sun

Boston University - Questrom School of Business

Date Written: January 29, 2012

Abstract

Voluntary disclosure theory predicts that an optimal disclosure decision should produce an overall net benefit for shareholders, and that such net benefit should decrease in public information availability. This study supports the predictions of voluntary disclosure theory in the context of climate change. Using voluntary disclosures made through the CSRwire news service, we find that managers’ disclosure decisions involving greenhouse gas emissions produce positive returns to shareholders. This response varies negatively with company size and public information availability. For small companies in a limited public information environment, we find that mean market-adjusted share price increases significantly by 2.32% over days −2 to 2 around the CSR newswire release date. Our sample of disclosing companies received an aggregate market value boost from their CSR news releases of approximately ten billion dollars, independent of differences in public information availability.

Keywords: Climate change voluntary disclosure, CSR newswire service, greenhouse gas emission information, event study, Fama-French model

JEL Classification: G14, M41, M45, K22, Q20

Suggested Citation

Griffin, Paul A. and Sun, Estelle, Going Green: Market Reaction to CSR Newswire Releases (January 29, 2012). Journal of Accounting and Public Policy, Vol. 32, No. 2, 2013. Available at SSRN: https://ssrn.com/abstract=1995132 or http://dx.doi.org/10.2139/ssrn.1995132

Paul A. Griffin (Contact Author)

University of California, Davis - Graduate School of Management ( email )

3102 Gallahger Hall
Davis, CA 95616
United States
(530) 752-7372 (Phone)
(425) 799-4143 (Fax)

HOME PAGE: http://www.gsm.ucdavis.edu/griffin/

University of California, Davis ( email )

3102 Gallahger Hall
Davis, CA 95616
United States
(530) 752-7372 (Phone)
(425) 799-4143 (Fax)

HOME PAGE: http://www.gsm.ucdavis.edu/griffin/

Estelle Yuan Sun

Boston University - Questrom School of Business ( email )

595 Commonwealth Avenue
Boston, MA MA 02215
United States
1-617-353-2353 (Phone)

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