Climate-related performance and stock price crash risk

Q1 Economics, Econometrics and Finance
Kyriaki Kosmidou, Dimitrios Kousenidis, Anestis Ladas, Christos Negkakis
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引用次数: 0

Abstract

We examine how environmental performance affects future stock price crash risk. Previous literature shows that legitimacy threats, stemming from environmental risk, lead firms to be particularly sensitive about environmental disclosure and performance. However, we hypothesise and find that under specific conditions, relating to lower operating performance, firms that have higher environmental performance also have higher future stock price crash risk. Further analysis shows that such firms may also have lower readability and more confident tone in their 10-K annual reports. We attribute these findings to impression management utilising environmental performance along with disclosure misdirection practices, where managers of firms with negative news, attempt in some cases to draw the attention of the users of financial reports by obfuscating annual reports for bad news hoarding purposes. Even though in the current year such practices may have a negative effect for stock price crash risk, future stock price crash risk increases due to the dissemination of the negative news in the market. Overall, our results show that environmental disclosure may be used, under certain conditions, as a tool for impression management, which along with financial reporting distraction practices, leads to higher future stock price crash risk.

与气候相关的业绩和股价暴跌风险
我们研究了环境绩效如何影响未来股价暴跌风险。以往的文献表明,环境风险带来的合法性威胁导致企业对环境信息披露和环境绩效特别敏感。然而,我们假设并发现,在与较低经营绩效相关的特定条件下,环境绩效较高的公司未来的股价暴跌风险也较高。进一步的分析表明,这类公司的 10-K 年报可读性可能更低,语气也更自信。我们将这些发现归因于印象管理层利用环境绩效和信息披露误导的做法,即有负面新闻的公司的管理者在某些情况下试图通过混淆年报来吸引财务报告用户的注意力,从而达到囤积坏消息的目的。即使在当年,这种做法可能会对股价暴跌风险产生负面影响,但由于负面消息在市场上的传播,未来股价暴跌风险会增加。总之,我们的研究结果表明,在某些条件下,环境信息披露可能会被用作印象管理的工具,这与财务报告分散注意力的做法一起,会导致未来股价暴跌风险的增加。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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来源期刊
Financial Markets, Institutions and Instruments
Financial Markets, Institutions and Instruments Economics, Econometrics and Finance-Economics, Econometrics and Finance (all)
CiteScore
1.80
自引率
0.00%
发文量
17
期刊介绍: Financial Markets, Institutions and Instruments bridges the gap between the academic and professional finance communities. With contributions from leading academics, as well as practitioners from organizations such as the SEC and the Federal Reserve, the journal is equally relevant to both groups. Each issue is devoted to a single topic, which is examined in depth, and a special fifth issue is published annually highlighting the most significant developments in money and banking, derivative securities, corporate finance, and fixed-income securities.
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