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Does corporate eco-innovation affect stock price crash risk?

Rashid Zaman, Nader Atawnah, Muhammad Haseeb, Muhammad Nadeem, Saadia Irfan

The British Accounting Review, Volume: 53, Issue: 5, Start page: 101031

Swansea University Author: Saadia Irfan

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DOI (Published version): 10.1016/j.bar.2021.101031

Abstract

We examine the effect of corporate environmental innovation (hereafter eco-innovation) on stock price crash risk and document a significant negative association. Utilising a large sample of publicly listed U.S. firms for the period 2003 to 2017, we find that an increase in eco-innovation from the 25...

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Published in: The British Accounting Review
ISSN: 0890-8389
Published: Elsevier BV 2021
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URI: https://cronfa.swan.ac.uk/Record/cronfa67288
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last_indexed 2024-08-02T15:12:17Z
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spelling v2 67288 2024-08-02 Does corporate eco-innovation affect stock price crash risk? 22bfa5485d1fbe647b75a8da2803a550 Saadia Irfan Saadia Irfan true false 2024-08-02 CBAE We examine the effect of corporate environmental innovation (hereafter eco-innovation) on stock price crash risk and document a significant negative association. Utilising a large sample of publicly listed U.S. firms for the period 2003 to 2017, we find that an increase in eco-innovation from the 25th to the 75th percentile is associated with 17.62% reduction in stock price crash risk. This outcome remains robust to a variety of sensitivity tests and after accounting for potential endogeneity concerns. Eco-innovative firms attract more institutional investors and equity analyst following and disclose more information leading to lower stock price crash risk. Additional tests reveal that the negative effect of eco-innovation is contingent on the political leadership's ideology and environmental sensitivity. Our paper contributes to the ongoing discourse on the costs and benefits of eco-innovation, documenting the value-enhancing perspective of eco-innovation. Journal Article The British Accounting Review 53 5 101031 Elsevier BV 0890-8389 Eco-innovation; Stock price crash risk; Information asymmetry; Political leadership&apos;s ideology 1 9 2021 2021-09-01 10.1016/j.bar.2021.101031 COLLEGE NANME Management School COLLEGE CODE CBAE Swansea University 2024-08-02T16:14:06.2892151 2024-08-02T11:02:08.1420012 Faculty of Humanities and Social Sciences School of Management - Accounting and Finance Rashid Zaman 1 Nader Atawnah 2 Muhammad Haseeb 3 Muhammad Nadeem 4 Saadia Irfan 5 67288__31042__262ce5c367434d36bc33cef691588ccc.pdf 67288.VoR.pdf 2024-08-02T16:12:50.8369997 Output 728118 application/pdf Version of Record true © 2021 The Authors. This is an open access article under the CC BY license. true eng http://creativecommons.org/licenses/by/4.0/
title Does corporate eco-innovation affect stock price crash risk?
spellingShingle Does corporate eco-innovation affect stock price crash risk?
Saadia Irfan
title_short Does corporate eco-innovation affect stock price crash risk?
title_full Does corporate eco-innovation affect stock price crash risk?
title_fullStr Does corporate eco-innovation affect stock price crash risk?
title_full_unstemmed Does corporate eco-innovation affect stock price crash risk?
title_sort Does corporate eco-innovation affect stock price crash risk?
author_id_str_mv 22bfa5485d1fbe647b75a8da2803a550
author_id_fullname_str_mv 22bfa5485d1fbe647b75a8da2803a550_***_Saadia Irfan
author Saadia Irfan
author2 Rashid Zaman
Nader Atawnah
Muhammad Haseeb
Muhammad Nadeem
Saadia Irfan
format Journal article
container_title The British Accounting Review
container_volume 53
container_issue 5
container_start_page 101031
publishDate 2021
institution Swansea University
issn 0890-8389
doi_str_mv 10.1016/j.bar.2021.101031
publisher Elsevier BV
college_str Faculty of Humanities and Social Sciences
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hierarchy_top_id facultyofhumanitiesandsocialsciences
hierarchy_top_title Faculty of Humanities and Social Sciences
hierarchy_parent_id facultyofhumanitiesandsocialsciences
hierarchy_parent_title Faculty of Humanities and Social Sciences
department_str School of Management - Accounting and Finance{{{_:::_}}}Faculty of Humanities and Social Sciences{{{_:::_}}}School of Management - Accounting and Finance
document_store_str 1
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description We examine the effect of corporate environmental innovation (hereafter eco-innovation) on stock price crash risk and document a significant negative association. Utilising a large sample of publicly listed U.S. firms for the period 2003 to 2017, we find that an increase in eco-innovation from the 25th to the 75th percentile is associated with 17.62% reduction in stock price crash risk. This outcome remains robust to a variety of sensitivity tests and after accounting for potential endogeneity concerns. Eco-innovative firms attract more institutional investors and equity analyst following and disclose more information leading to lower stock price crash risk. Additional tests reveal that the negative effect of eco-innovation is contingent on the political leadership's ideology and environmental sensitivity. Our paper contributes to the ongoing discourse on the costs and benefits of eco-innovation, documenting the value-enhancing perspective of eco-innovation.
published_date 2021-09-01T16:14:04Z
_version_ 1806289228104990720
score 11.0241995

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