{"title":"“Green Companies” and Financial Performance: The Green Premium","authors":"Athanasios Kranias , Dimitrios Psychoyios , Apostolos-Paul Refenes","doi":"10.1016/j.iref.2024.103525","DOIUrl":null,"url":null,"abstract":"<div><p>We examine the relationship between Corporate Environmental Responsibility and Corporate Financial Performance for the S&P500 firms over a period of fifteen years. We test the effect of Jensen's alpha, stock returns, return-on-asset, size, sales, and profit on Corporate Environmental Responsibility by building a CAPM model of risk-adjusted excess returns under efficient-market hypothesis and introduce the “Green Premium,” the cost in stock return stockholders have to incur for their company's “greenness”. Although, “green” practices are positively related to sales and profit, the results suggest that market value of the company is not increased and that a significant negative relationship exists between “greenness” and stock's performance.</p></div>","PeriodicalId":14444,"journal":{"name":"International Review of Economics & Finance","volume":"96 ","pages":"Article 103525"},"PeriodicalIF":4.8000,"publicationDate":"2024-08-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"International Review of Economics & Finance","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S1059056024005173","RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
We examine the relationship between Corporate Environmental Responsibility and Corporate Financial Performance for the S&P500 firms over a period of fifteen years. We test the effect of Jensen's alpha, stock returns, return-on-asset, size, sales, and profit on Corporate Environmental Responsibility by building a CAPM model of risk-adjusted excess returns under efficient-market hypothesis and introduce the “Green Premium,” the cost in stock return stockholders have to incur for their company's “greenness”. Although, “green” practices are positively related to sales and profit, the results suggest that market value of the company is not increased and that a significant negative relationship exists between “greenness” and stock's performance.
期刊介绍:
The International Review of Economics & Finance (IREF) is a scholarly journal devoted to the publication of high quality theoretical and empirical articles in all areas of international economics, macroeconomics and financial economics. Contributions that facilitate the communications between the real and the financial sectors of the economy are of particular interest.