Accounting and Finance PhD Research Seminar – Congjing Song

Title: Corporate Environmental Performance and Stock Price Crash Risk

Date:  31  January 2024

Time: 13:00- 14:00

Location: FDC.1.16

If you would like to attend, please register using the following link:

Corporate Environmental Performance and Stock Price Crash Risk

Speaker: Congjing Song, NUBS PhD student

Abstract:

Recent studies reveal that investing in Corporate Environmental Performance (CEP) enhances the financial performance of firms, facilitates their access to bank loans, strengthens environmental disclosure practices, reduces the cost of debt, and mitigates both the systematic, and the idiosyncratic risks. However, studies that investigate the relationship between CEP and stock price crash risk are scarce, if any. In this paper, we explore the above relationship, accounting for the possible effect of the Covid-19 pandemic. Our analysis relies on a unique data set that extends from 2004 to 2022 and consists of 6194 firms across 10 different industries in 44 economies. The results show that CEP is negatively linked to the stock price crash risk and that institutional investors, along with analysts’ coverage play a significant role in the relationship under scrutiny. Importantly, the Covid-19 crisis significantly distorts the linkage between CEP and stock price crash risk.