 Does corporate environmental responsibility create value?: Evidence from supreme Court rulingsTaehyun Kim and Yongjun Kim Journal of Behavioral and Experimental Finance, 2025, vol. 45, issue C Abstract: We investigate the impact of corporate environmental responsibility (CER) actions on firm value, using two 5-to-4 Supreme Court rulings. Employing an event study approach, we find that firms expected to increase CER activities experience positive market reactions. The market reactions are greater for firms that are under more significant CER pressure from the Court decisions. These return patterns are more pronounced among firms located in states with Democratic state governments and in regions with high levels of social trust where stakeholders are more attentive to CER. Additionally, we examine the relationship between CER and corporate financial performance, and find that firms with strong CER policies tend to have a higher level of revenue, profitability, and ownership held by institutional investors with longer investment horizons. Our evidence suggests that the market views CER as essential for meeting the growing sustainability demands in today’s financial markets. Keywords: Corporate environmental responsibility (CER); Environmental, social, and governance (ESG); Supreme Court rulings; Event studies; Announcement returns (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:beexfi:v:45:y:2025:i:c:s2214635024001217 DOI: 10.1016/j.jbef.2024.101006 Access Statistics for this article Journal of Behavioral and Experimental Finance is currently edited by Michael Dowling and Jürgen Huber More articles in Journal of Behavioral and Experimental Finance from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.