Disclosure of Environmental Violations and the Stock Market in the Republic of Korea

39 Pages Posted: 20 Apr 2016

See all articles by Susmita Dasgupta

Susmita Dasgupta

World Bank - Development Research Group (DECRG)

Jong Ho Hong

Hanyang University - Economics

Benoît Laplante

World Bank - Research Department

Nlandu Mamingi

University of the West Indies (Bridgetown)

Date Written: June 2004

Abstract

For almost 20 years, the Ministry of Environment of the Republic of Korea has published on a monthly basis a list of enterprises that fail to comply with national environmental laws and regulations. In this paper, the authors examine the reaction of investors to the publication of these lists and show that enterprises appearing on these lists have experienced a significant decline in their market valuation.

Firms in developing countries are often said to have no incentives to invest in pollution control because they typically face weak monitoring and enforcement of environmental regulations. The findings of the authors, however, indicate that the inability of formal institutions to control pollution through fines and penalties may not be as serious an impediment to pollution control as is generally argued. Environmental regulators in developing countries could harness market forces by introducing structured programs to release firm-specific information about environmental performance.

This paper - a product of the Infrastructure and Environment Team, Development Research Group - is part of the group's work on industrial pollution control.

Keywords: Environmental violations, public disclosure, stock market, Korea

Suggested Citation

Dasgupta, Susmita and Hong, Jong Ho and Laplante, Benoît and Mamingi, Nlandu, Disclosure of Environmental Violations and the Stock Market in the Republic of Korea (June 2004). Available at SSRN: https://ssrn.com/abstract=610388

Susmita Dasgupta (Contact Author)

World Bank - Development Research Group (DECRG) ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States
202-473-2679 (Phone)
202-522-3230 (Fax)

HOME PAGE: http://econ.worldbank.org/staff/sdasgupta

Jong Ho Hong

Hanyang University - Economics

Seoul 133-791
Korea

Benoît Laplante

World Bank - Research Department ( email )

1818 H Street, N.W.
Washington, DC 20433
United States
202-458-5878 (Phone)
202-522-3230 (Fax)

Nlandu Mamingi

University of the West Indies (Bridgetown) ( email )

Department of Economics
Cave Hill
Barbados
246-417-4273 (Phone)
246-417-4270 (Fax)

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
211
Abstract Views
1,380
Rank
261,711
PlumX Metrics