On the Obligation to Provide Environmental Information in the 21st Century – Empirical Evidence from Germany

University of Heidelberg, Department of Economics Discussion Paper No. 524

26 Pages Posted: 18 Jul 2012

See all articles by Philipp Massier

Philipp Massier

ZEW – Leibniz Centre for European Economic Research - Environmental and Resource Economics, Environmental Management Research

Daniel Römer

Heidelberg University - Alfred Weber Institute for Economics; ZEW – Leibniz Centre for European Economic Research

Date Written: March 7, 2012

Abstract

In this paper, we study the effectiveness of environmental information disclosure as a regulatory instrument. In particular we analyze its impact when environmental regulation is already advanced. Using German stock market data, we are able to identify the impact of the European Pollutant Emission Register (EPER) on the market value of listed firms using a Multivariate Regression Model (MVRM). First, we show that the publication of EPER data leads to negative abnormal returns of the respective listed firms in Germany. Second, we study drivers of these abnormal returns. Here, we find that the firms' individual level of non-carbon emissions can explain the observed changes in market valuation, while carbon dioxide emissions do not seem to be punished by the market. Moreover, we include information on voluntarily provided environmental reports and find that these reports can serve as a substitute to the obligatory register.

Keywords: information disclosure, EPER, event study, environmental reports

JEL Classification: L51, Q52, G14

Suggested Citation

Massier, Philipp and Römer, Daniel and Römer, Daniel, On the Obligation to Provide Environmental Information in the 21st Century – Empirical Evidence from Germany (March 7, 2012). University of Heidelberg, Department of Economics Discussion Paper No. 524, Available at SSRN: https://ssrn.com/abstract=2111088 or http://dx.doi.org/10.2139/ssrn.2111088

Philipp Massier

ZEW – Leibniz Centre for European Economic Research - Environmental and Resource Economics, Environmental Management Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim
Germany

Daniel Römer (Contact Author)

ZEW – Leibniz Centre for European Economic Research ( email )

P.O. Box 10 34 43
L 7,1
D-68034 Mannheim, 68034
Germany

Heidelberg University - Alfred Weber Institute for Economics ( email )

Bergheimer Str. 20
Heidelberg, D-69115
Germany

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