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Stock Market Reactions to Environmental News in the Food Industry

Published online by Cambridge University Press:  26 January 2015

Zsuzsanna Deák  and
Berna Karali
Zsuzsanna Deák
Affiliation:
Department of Food Economy, Corvinus University of Budapest, Budapest, Hungary
Berna Karali
Affiliation:
Department of Agricultural & Applied Economics, The University of Georgia, Athens, Georgia
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Abstract

Few studies to date have addressed the relationship between the food industry's environmental and financial performances although the industry is one of the biggest contributors of greenhouse gas emissions. We analyze the impact of environmental news about selected food companies on their stock prices. Results show that positive (negative) events that are the result of direct internal company actions lead to higher (lower) predicted returns, whereas events related to third-party opinions lead to smaller changes in predicted returns in short event windows. This study highlights the importance of conducting the analysis on a disaggregated basis by incorporating firm-level variables.

Keywords

environmental performancefirm-level indicatorsfood industrynews impactstock marketsG14G30
Type
Research Article
Information
Journal of Agricultural and Applied Economics , Volume 46 , Issue 2 , May 2014 , pp. 209 - 225
Copyright
Copyright © Southern Agricultural Economics Association 2014

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