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PARTICIPATION OF FIRMS IN VOLUNTARY ENVIRONMENTAL PROTECTION PROGRAMS: AN ANALYSIS OF CORPORATE SOCIAL RESPONSIBILITY AND CAPITAL MARKET PERFORMANCE
Author(s) -
YU FEI
Publication year - 2012
Publication title -
contemporary economic policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.454
H-Index - 49
eISSN - 1465-7287
pISSN - 1074-3529
DOI - 10.1111/j.1465-7287.2010.00248.x
Subject(s) - business , turnover , corporate social responsibility , market capitalization , accounting , agency (philosophy) , stock market , capital market , finance , capitalization , social responsibility , public economics , economics , public relations , paleontology , philosophy , linguistics , management , epistemology , horse , political science , biology
The Environmental Protection Agency (EPA) employs voluntary programs as a policy instrument to encourage firms to go beyond mere compliance with laws and regulations in protecting the environment. Based on event study methodology, this paper tests for abnormal stock market returns from membership in the National Environmental Performance Track (NEPT) program. The analysis shows that there is strong evidence that acceptance of a facility to the NEPT adds significantly to the market capitalization of the accepted firms. Corporate social responsibility can be financially rewarding for firms and voluntary programs of the EPA can be an effective complement to performance‐based regulatory instruments. ( JEL G14, Q58)