TY - JOUR

T1 - Stock price reactions to environmental pollution events

T2 - A systematic literature review of direct and indirect effects and a research agenda

AU - Bouzzine, Yassin Denis

N1 - 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

PY - 2021/9/20

Y1 - 2021/9/20

N2 - 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.

AB - 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.

KW - Engineering

KW - Environmental pollution event

KW - event study

KW - Systematic literature review

KW - research agenda

UR - http://www.scopus.com/inward/record.url?scp=85110553296&partnerID=8YFLogxK

UR - https://www.mendeley.com/catalogue/082bd748-56d3-3821-bee8-53f569b3e0ce/

U2 - 10.1016/j.jclepro.2021.128305

DO - 10.1016/j.jclepro.2021.128305

M3 - Scientific review articles

VL - 316

JO - Journal of Cleaner Production

JF - Journal of Cleaner Production

SN - 0959-6526

M1 - 128305

ER -