Title: Do investors care about corporate environmental responsibility engagement?

Authors: Khaldoon Albitar; Siming Liu; Khaled Hussainey; Gaoke Liao

Addresses: Faculty of Business and Law, University of Portsmouth, Portsmouth, UK ' School of Statistics, University of International Business and Economics, Beijing, China ' Faculty of Business and Law, University of Portsmouth, Portsmouth, UK ' Guangzhou Institute of Finance, Guangzhou University, Guangzhou, China

Abstract: We aim to investigate the effect of corporate environmental responsibility (CER) engagement on investors' reactions. We also explore heterogeneity of this impact among different types of companies and different company's market performance. We use panel data models and quantile regression based on data related to firms listed on the A-share China security market and the final sample consists of 3,776 firm-year observations. The results show that CER engagement has a significant positive impact on investors' investment decisions. Further, investors are more sensitive to CER engagement of high energy-consumption companies and no matter the company is a state-owned or a non-state-owned, CER engagement has a significant positive impact on investors' reactions. CER engagement has a significant positive impact on investors' reactions in all quantiles except one and the promoting effect increases first and then decreases with the growth of corporate market value from lower to upper quantiles.

Keywords: investor's reaction; corporate environmental responsibility; high energy-consumption; corporate market performance; heterogeneity.

DOI: 10.1504/IJBGE.2023.132079

International Journal of Business Governance and Ethics, 2023 Vol.17 No.4, pp.393 - 415

Received: 08 Apr 2021
Accepted: 08 Aug 2021
Published online: 11 Jul 2023 *

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