The contagion effect of environmental violations: The case of Dieselgate in Germany

Publikation: Beiträge in ZeitschriftenZeitschriftenaufsätzeForschungbegutachtet

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The contagion effect of environmental violations: The case of Dieselgate in Germany. / Bouzzine, Yassin Denis; Lueg, Rainer.
in: Business Strategy and the Environment, Jahrgang 29, Nr. 8, 12.2020, S. 3187-3202.

Publikation: Beiträge in ZeitschriftenZeitschriftenaufsätzeForschungbegutachtet

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@article{758eb40904d34d81932fe9399c8db95e,
title = "The contagion effect of environmental violations: The case of Dieselgate in Germany",
abstract = "We examine how environmental violations affect the stock returns of the violating firm and how these financial implications then spread to industry peers. Volkswagen's diesel emissions scandal (Dieselgate) and the German automotive industry serve as aseminal case for the examination. Research often limits examinations of corporateenvironmental scandals to the primary event announcement. Yet the Dieselgate scandal exhibits a processual character that requires the examination of multiple events overtime. We identify 10 Dieselgate events and employ event study methodology to detect abnormal stock reactions. Based on agency and signaling theory, the results indicate that Dieselgate has harmed the stock returns of Volkswagen and its industry peers substantially. Surprisingly, Volkswagen suffered financial damage only upon the initial event of Dieselgate. Subsequent events had significant effects only on industry peers.These findings contribute comprehensively to the research of environmental misconductand provide valuable implications for practitioners.",
keywords = "Management studies, business model, contagion effect, dieselgate, environmental violation, event study, german automotive industry",
author = "Bouzzine, {Yassin Denis} and Rainer Lueg",
note = "Publisher Copyright: {\textcopyright} 2020 The Authors. Business Strategy and The Environment published by ERP Environment and John Wiley & Sons Ltd",
year = "2020",
month = dec,
doi = "10.1002/bse.2566",
language = "English",
volume = "29",
pages = "3187--3202",
journal = "Business Strategy and the Environment",
issn = "0964-4733",
publisher = "John Wiley & Sons Ltd.",
number = "8",

}

RIS

TY - JOUR

T1 - The contagion effect of environmental violations

T2 - The case of Dieselgate in Germany

AU - Bouzzine, Yassin Denis

AU - Lueg, Rainer

N1 - Publisher Copyright: © 2020 The Authors. Business Strategy and The Environment published by ERP Environment and John Wiley & Sons Ltd

PY - 2020/12

Y1 - 2020/12

N2 - We examine how environmental violations affect the stock returns of the violating firm and how these financial implications then spread to industry peers. Volkswagen's diesel emissions scandal (Dieselgate) and the German automotive industry serve as aseminal case for the examination. Research often limits examinations of corporateenvironmental scandals to the primary event announcement. Yet the Dieselgate scandal exhibits a processual character that requires the examination of multiple events overtime. We identify 10 Dieselgate events and employ event study methodology to detect abnormal stock reactions. Based on agency and signaling theory, the results indicate that Dieselgate has harmed the stock returns of Volkswagen and its industry peers substantially. Surprisingly, Volkswagen suffered financial damage only upon the initial event of Dieselgate. Subsequent events had significant effects only on industry peers.These findings contribute comprehensively to the research of environmental misconductand provide valuable implications for practitioners.

AB - We examine how environmental violations affect the stock returns of the violating firm and how these financial implications then spread to industry peers. Volkswagen's diesel emissions scandal (Dieselgate) and the German automotive industry serve as aseminal case for the examination. Research often limits examinations of corporateenvironmental scandals to the primary event announcement. Yet the Dieselgate scandal exhibits a processual character that requires the examination of multiple events overtime. We identify 10 Dieselgate events and employ event study methodology to detect abnormal stock reactions. Based on agency and signaling theory, the results indicate that Dieselgate has harmed the stock returns of Volkswagen and its industry peers substantially. Surprisingly, Volkswagen suffered financial damage only upon the initial event of Dieselgate. Subsequent events had significant effects only on industry peers.These findings contribute comprehensively to the research of environmental misconductand provide valuable implications for practitioners.

KW - Management studies

KW - business model

KW - contagion effect

KW - dieselgate

KW - environmental violation

KW - event study

KW - german automotive industry

UR - http://www.scopus.com/inward/record.url?scp=85087620327&partnerID=8YFLogxK

U2 - 10.1002/bse.2566

DO - 10.1002/bse.2566

M3 - Journal articles

VL - 29

SP - 3187

EP - 3202

JO - Business Strategy and the Environment

JF - Business Strategy and the Environment

SN - 0964-4733

IS - 8

ER -

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