EconPapers    
Economics at your fingertips  
 

Environmental law enforcement as external monitoring: Evidence from the impact of an environmental inspection program on firm-level stock price crash risk

Xuehui Zhang, Jianhua Tan and Kam C. Chan

International Review of Economics & Finance, 2021, vol. 71, issue C, 21-31

Abstract: Leveraging from the recent reform in the China’s new environmental inspector program (NEIP) as a natural experiment, we document that firms located in NEIP cities having lower future stock price crash risk than those located in non-NEIP cities. The findings are consistent with the notion that firms disclose more negative news when subject to enhanced environmental monitoring leading to a lower future stock price crash risk. Hence, environmental law enforcement has a deterrent effect on firms and making them more transparent. Overall, besides the impact on environment, environment law enforcement brings unintended positive effects on firm-level governance.

Keywords: Environmental law enforcement; External monitoring; Crash risk (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1059056020302008
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:reveco:v:71:y:2021:i:c:p:21-31

DOI: 10.1016/j.iref.2020.08.020

Access Statistics for this article

International Review of Economics & Finance is currently edited by H. Beladi and C. Chen

More articles in International Review of Economics & Finance from Elsevier
Bibliographic data for series maintained by Nithya Sathishkumar ().

 
Page updated 2021-03-09
Handle: RePEc:eee:reveco:v:71:y:2021:i:c:p:21-31