Does corporate environmental responsibility create value?: The role of investors’ ESG preferences

Taehyun Kim and Yongjun Kim

Economics Letters, 2024, vol. 241, issue C

Abstract: We exploit novel micro-level emission data to investigate whether corporate environmental responsibility enhances stock value. This green premium is more pronounced for firms located in regions where residents have high social trust or held by shareholders with long-term investment horizons. The results suggest that the positive shocks in demands for corporate environmental responsibility among market participants drive the differences in returns between firms that successfully transition to a green economy and those that do not. Overall, the results underline the pivotal role of investor preference for ESG in generating the green premium.

Keywords: Corporate environmental responsibility; Green premium; ESG; Investment horizons; Social trust (search for similar items in EconPapers)
JEL-codes: G1 G11 G32 M14 Q5 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S016517652400274X
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:241:y:2024:i:c:s016517652400274x

DOI: 10.1016/j.econlet.2024.111790

Access Statistics for this article

Economics Letters is currently edited by Economics Letters Editorial Office

More articles in Economics Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().