How do investors respond to Green Company Awards in China?

Thomas Lyon*, Yao Lu, Xinzheng Shi, Qie Yin

*Corresponding author for this work

Research output: Contribution to journalJournal articlepeer-review

95 Citations (Scopus)


We find that firms winning Green Company Awards in China from 2008 to 2011 experienced on average insignificant and in some cases significantly negative effects on shareholder value. Various robustness checks suggest that these findings are not driven by the inefficiency of the Chinese stock market or a lack of perceived credibility of the award. In addition, we find important variation in the responses across firms: shareholders of firms in low-pollution industries and firms with primarily private ownership responded more negatively to award announcements. Furthermore, the peers of winning firms showed higher announcement returns than the award winners. Our results suggest that a key benefit of corporate environmentalism in China comes through building stronger relationships with government, and that otherwise the market generally discourages firms from environmental leadership.
Original languageEnglish
Pages (from-to)1-8
Number of pages8
JournalEcological Economics
Publication statusPublished - Oct 2013

User-Defined Keywords

  • China
  • Corporate social responsibility
  • Event study
  • Green Company Award
  • Shareholder value


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