Research On Listing Corporation’s Market Reaction

With the intensification of the global environmental pollution, the worldenvironmentalists have raised a strong voice for the protection of the environment.Environmental issues are often mentioned in the international and domesticconferences. Studying environmental issues is not only very important, but also verynecessary. Songhua River pollution incident in2010aroused the concern of the wholesociety. Many scholars have studied the subsequent impact of the event. This articleopens another point of view and study the market reaction of the Songhua riverpollution incident.The paper first reviews the concepts and theories of market reaction ofenvironment pollution incidents. Environmental Accounting Research in China hasgreatly increased in quantity and quality. Chinese scholars absorb foreign outstandingachievements on environmental accounting. They combine with the actual situation ofthe country to be innovative. There are a lot of problems need to be addressed. Thereare not many empirical researches. This article wants to complement empirical studiesof the market reaction of environment pollution incidents.This paper studies the market reaction of the environmental pollution incident.The sample is from Shanghai and Shenzhen stock markets. According to the theory ofpath dependence, the companies are chemical industry companies, and the industrycode is C43. This paper uses event study method to research market reaction. Thispaper calculates the abnormal rate of return by using market model and constant meanadjusted model. This paper finds that the chemical listing corporations have noobvious adverse reaction.According to the market reaction of the SongHua river pollution incident, thispaper also studies the relation between environmental information disclosure score oflisting corporation and corporation performance. Disclosure environmentalinformation is got through consulting listing corporation report and socialresponsibility report. Environmental information disclosure of the content is dividedinto seven major categories. Seven categories include: laws and regulations,environmental expenditure and risk, land pollution and remediation, pollutionreduction, sustainable development, environmental management and other. The paperuses the linear regression model to study the relation between corporate performanceand the environmental information disclosure score. The result showed no significantcorrelation between them.This paper analyses the results. Investors’ environmental consciousness is notstrong. Their demand for environmental information is weak. Enterprises do not payenough attention to the environment protection. Some enterprises’ development goalsare simply economic interests. China’s capital market has developed for a relativelyshort time, not developed. The monitoring and management of Enterprises’environmental pollution should be strengthened. The relevant laws and regulationsshould to be perfect. According to the results of the analysis, this paper gives somesuggestion. The suggestion is about promoting the enterprises to carry out environmental protection, improving the quality of environmental informationdisclosure.