Abstract
AbstractChina's economic miracle has been achieved at considerable environmental cost. To fight against environmental pollution more effectively, the Chinese government established the Ministry of Environmental Protection (MEP) in 2008. This study investigates the stock market reaction to this event and finds that, on average, listed firms in polluting industries experienced a statistically and economically significant negative abnormal return on the event date, which implies that the compliance costs of these polluting firms are expected to increase. In addition, this study finds that enterprises with different ownership styles and different political influence experienced different price reactions during the event window. More specifically, state-owned enterprises (SOEs) in general experienced a less negative abnormal return over different event windows, and provincial SOEs perform much better than central SOEs and sub-provincial SOEs.
Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
