Stock Price Responses to the Eco-Points Programme for Electrical Household Appliances: Evidence from Japan

Abstract

This paper examines the Japanese government’s ‘Project for Green Consumer Electronics to Promote Business through the Use of Eco-points’ and its economic impact on consumer electronics firms’ stock prices. In order to achieve our aim, we employ event study methodology. Our results show that stock prices responded positively to programme adoption, thereby indicating that the programme had positive effects on the related firms’ performance. The results also show that the programme’s economic effects gradually decreased over each subsequent programme extension. This probably occurred because the programme targeted durable goods, which consumers do not replace frequently.

Keywords: event study; environmental stimulus policy; capital market

JEL Classification: G14, H30, Q58