Environmental Controversies and Initiatives: Stakeholder Responses to Conflicting Signals.

Stakeholders receive diverse signals regarding a firm's environmental practices, influencing their reactions and subsequently impacting the firm's market value. This study acknowledges these signals as either positive (stemming from the firm's environmental initiatives) or negative (emanating from environmental controversies highlighted by external sources). Our analysis not only scrutinizes the impact of these positive and negative signals on firm market value but also explores their specific characteristics, encompassing volume, persistence, and strength. Additionally, we investigate the interplay between environmental initiatives and controversies on firm market value. The results derived from examining a sample of 346 publicly listed firms spanning from 2006 to 2022 reveal the contrasting effects that positive and negative signals exert on a firm's market value. Moreover, we find an interaction effect between these signals, which emphasizes the necessity of considering signal characteristics for a comprehensive understanding of their implications. [ABSTRACT FROM AUTHOR]