Contemporary research documents a positive but weak price premium from environmental performance （EP）. The specific circumstances of pricing EP of large and small companies and in polluting and clean industries have...Contemporary research documents a positive but weak price premium from environmental performance （EP）. The specific circumstances of pricing EP of large and small companies and in polluting and clean industries have not, however, been investigated. This study predicts that financial markets price EP beyond financial fundamentals differently, depending on company size and the environmental risk of the industry and provides evidence relying on a set of the Sweden Stock Market 300 （SIX 300） companies listed on the Stockholm Stock Exchange （OMX Stockholm）. Applying a value relevance model, the average results are in line with previous findings that EP adds value beyond the book value of equity and earnings. The asymmetry in EP is, however, driven by company size and the environmental risk of the industry. This study suggests that large companies in low-risk industries obtain strong price premiums from being environmental industry leaders. In contrast, small companies and also companies in high-risk industries do not necessarily accrue the same market benefits.展开更多
文摘Contemporary research documents a positive but weak price premium from environmental performance （EP）. The specific circumstances of pricing EP of large and small companies and in polluting and clean industries have not, however, been investigated. This study predicts that financial markets price EP beyond financial fundamentals differently, depending on company size and the environmental risk of the industry and provides evidence relying on a set of the Sweden Stock Market 300 （SIX 300） companies listed on the Stockholm Stock Exchange （OMX Stockholm）. Applying a value relevance model, the average results are in line with previous findings that EP adds value beyond the book value of equity and earnings. The asymmetry in EP is, however, driven by company size and the environmental risk of the industry. This study suggests that large companies in low-risk industries obtain strong price premiums from being environmental industry leaders. In contrast, small companies and also companies in high-risk industries do not necessarily accrue the same market benefits.
