1 / 18

Yukiko Omata Tokyo Institute of Technology Department of Social Engineering

Does the Stock Market Value the Firm’s Potential Chemical Risk Released and Transferred? : Empirical Study on the Japanese Pollutant Release and Transfer Register System. Yukiko Omata Tokyo Institute of Technology Department of Social Engineering. Back ground of my research.

adriel
Download Presentation

Yukiko Omata Tokyo Institute of Technology Department of Social Engineering

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Does the Stock Market Value the Firm’s Potential Chemical Risk Released and Transferred? : Empirical Study on the Japanese Pollutant Release and Transfer Register System Yukiko Omata Tokyo Institute of Technology Department of Social Engineering

  2. Back ground of my research Conventional policy (command-and-control regulations, environmental taxies） →　voluntary instruments, information provision policies It is important for firms to be valued for less pollution in the market. Why market values the firms with less polluting? →Firms with high polluting levels may face greater risk of environmental liabilities and lawsuit. →　Investors are therefore likely to prefer firms that pollute lower levels.

  3. Purpose of my research Does financial market value pollutions of the firm negatively? Does financial market distinguish the type of pollutions?

  4. The Pollutant Release and Transfer Register (PRTR) system This is information provision policies in Japan. This system has been in force since 2001. The facilities handling chemical substances potentially hazardous to the environment need to estimate annual amounts. The government has been releasing to the public annually.

  5. On-site releases and Off-site transfers Releases to air manufacture Raw materials Transfers to off-site Releases to the land Releases to the public water bodies Transfers to sewage

  6. The amounts of reported releases and transfers.

  7. The ratio of emissions to total amounts

  8. Previous studies

  9. Contribution of this paper There is few studies that relationships between market value and emission reduction in Japan. I distinguishes between on-site releases and off-site transfers to examine whether information provision has differential impacts on pollutants.

  10. Data Sample 140 firms from Nikkei300 (food and beverage; pulp and paper; chemical; pharmacy; oil; tuber; steel; nonmetal; machinery; metalworking; electric equipment; automobile; electric machinery; precision instrument; textiles; transportation; construction; gas) 840 firm-year observations for the year 2001-2006.

  11. Model

  12. Variables

  13. Regression Analysis Technique Endogeneity problem Unknown variable may affect both reductions of emissions and the market value of the firm. 2. Causation between market value and chemical risk. (not correlation) →Lagged variables help ascertain the causal relationships between market valuation and environmental performance

  14. Result ***, ** and * indicate statistical significance at the 1% level, the 5% level and the 10% level respectively

  15. Total effects

  16. Findings Firms with high on-site releases have negatively effect to market value. Firms with high off-site transfers and total pollutions have positively effect to market value. 3. Firms facing high consumer pressure have less total emissions or off-site transfers. 4. Firms facing high consumer pressure have more on-site releases.

  17. Conclusions Market values firms with less polluting in Japan.

More Related