Stock price reactions to environmental pollution events: A systematic literature review of direct and indirect effects and a research agenda

Research output: Journal contributionsScientific review articlesResearch


Stock price reactions to environmental pollution events are spiking increasing academic interest. This systematic literature review covers 38 stock-based event studies from 1990 to 2020. I categorize the extant literature into four subfields: pollution disclosures; environmental violation, legal penalty, and law enforcement disclosures; environmental disaster disclosures; and, multifaceted disclosures. I review these studies from three distinct perspectives: empirical results, theoretical frameworks, and methodological approaches. The empirical results in the extant literature unanimously support negative stock price reactions to all environmental pollution events, irrespective of the research sample. My review of the frameworks illustrates how researchers mobilize diverse rationales to explain their similar results. I also review the rigor of the methods based on seven established criteria. I then synthesize our three distinct review perspectives. In total, I identify 13 limitations in this area. I close by deriving concise recommendations to support future research and help to advance insights into this field.
Original languageEnglish
Article number128305
JournalJournal of Cleaner Production
Number of pages16
Publication statusPublished - 20.09.2021

Bibliographical note

Funding Information:
I am very thankful to Rainer Lueg and Svitlana Sapolski for reviewing the manuscript and providing helpful remarks and comments that helped to improve its quality. Results of this study have also been presented at the 37th EGOS Colloquium – Organizing for an Inclusive Society: Meanings, Motivations & Mechanisms and at the EURAM 2021 Conference: Reshaping capitalism for a sustainable world.

Publisher Copyright:
© 2021 Elsevier Ltd

    Research areas

  • Engineering - Environmental pollution event, event study, Systematic literature review, research agenda