Research On Capital Market Reaction To Environmental Pollution Liability Insurance

This paper examines the capital market reaction of Environmental Pollution Liability Insurance after Ministry of Environmental Protection released the list of insured company for the first time in 2014.The Event Study is used to calculate the cumulative abnormal return(CAR)of the stock before and after the event.The research results of this paper find that the CAR of insured companies after the event are significantly higher than those of non-insured companies,indicating that the capital market has responded positively to the insured enterprises.Among the insured companies,the CAR of voluntarily insured companies after the event was significantly higher than that of the compulsory insurance companies,indicating that the capital market was more active in responding to the companies that voluntarily insured.The results of further research show that the CAR of insured companies and voluntarily insured companies with the increase of analysts’ attention.That is,the efficiency of the incremental information of environmental information is different,under the different attentions of capital market.If the company has less analyst’s attention,investors can make full use of the company’s insurance information as a reference for their investment transactions,and if it is voluntary behavior,they can make better of these information,while the reaction of capital market is more positive.This paper provides empirical evidence of the economic consequences o f environmental insurance liability insurance for the companies from the perspective of capital market,which enriches the related research of environmental pollution liability insurance,and helps promote the practice of environmental pollution liability insurance and the development of Green Finance in China.