Eco-Efficiency and Stock Market Volatility: Emerging Markets Analysis

Alicia Fernanda Galindo-Manrique, Esteban Pérez-Calderón and Martha del Pilar Rodríguez-García
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Alicia Fernanda Galindo-Manrique: Accounting and Finance Academic Department, Instituto Tecnológico y de Estudios Superiores de Monterrey, Av. Eugenio Garza Sada, 2501 Sur Col. Tecnológico, Monterrey 64849, Mexico
Esteban Pérez-Calderón: Accounting and Financial Economy Department, University of Extremadura, Av. Elvas, s/n, 06004 Badajoz, Spain
Martha del Pilar Rodríguez-García: Accounting and Administration Faculty, Universidad Autónoma de Nuevo León, San Nicolás de los Garza 66451, Mexico

Administrative Sciences, 2021, vol. 11, issue 2, 1-13

Abstract: Climate change, the accelerated industrialization of emerging countries, as well as the growing demand for transparency from stakeholders, are all factors that influence the environmental performance of companies. Thus, eco-efficient behavior can improve financial performance by increasing wealth generation and decreasing the volatility of listed financial assets. There is a lot of previous literature showing diverse results of the effect of eco-efficiency on corporate profitability, but this is not the case when we refer to risk. This study analyzes the relationship between eco-efficient behavior and the share price volatility of companies traded in emerging markets. For this purpose, a sample of 346 companies listed in 24 countries was studied for the period between 2010 and 2017. The results show a positive effect. Thus, the recommendation is that a clear commitment to eco-efficient investment can improve the environmental impact of companies, from the private, public, and institutional spheres.

Keywords: volatility; eco-efficiency; financial performance; emerging markets; panel data (search for similar items in EconPapers)
JEL-codes: L M M0 M1 M10 M11 M12 M14 M15 M16 (search for similar items in EconPapers)
Date: 2021
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