Market Reaction to Firms' Carbon Footprint Disclosures: Evidence from Nine Countries in East Asian

Abstract

This study tested the reaction of the capital market and the production market to firms' carbon footprint disclosures. The data were taken from nine East Asian countries from 2006 to 2011. In the capital market, announcements of abnormal returns were positive after 2010, but the extent of these was small. In the production market, there was no significant change in the sales growth rate after carbon footprint disclosure. Evidence shows that the benefit of carbon footprint disclosure is not significant. More well-established regulations are necessary to promote carbon footprint disclosure.