1. The Economic Performance of European Stock Corporations.
- Author
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Rennings, Klaus, Schröder, Michael, and Ziegler, Andreas
- Subjects
CORPORATIONS ,STOCKS (Finance) ,SOCIOECONOMICS ,BUSINESS enterprises ,FINANCE - Abstract
Concerning the relationship between sustainability and economic performance, this paper examines the effect of environmental and social performance on the stock performance of European stock corporations. Stock performance is measured as the average monthly stock return for the period 1996-2001. The sustainability performance is measured both by an evaluation of the environ mental or social risks of the industry to which a company belongs and by an evaluation of the environmental or social activities of a company relative to the industrial average. We apply two-stage econometric approaches, which include recent insights from empirical finance. The most important result is that a higher environmental sector performance has a significantly positive influence on the stock performance. In contrast, a higher social sector performance has a negative influence. This effect is somewhat less significant The variables of corporate environmental and/or social activities relative to the industry average have no significant effect. [ABSTRACT FROM AUTHOR]
- Published
- 2003
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