Abstract
The purpose of this study is to examine how environmental factors influence a firms’s stock price. This paper analyzes the theory in two parts: (1) investors’ reactions to the eco-friendly (-harmful) companies, and the relationship between environmental performance and the expected stock return; (2) the relationship between firm’s environmental performance and intangible assets, and the relationship between firm’s intangible assets and firm’s market value. In this paper, I suggest two hypotheses. The first hypothesis is that fewer investors demand ownership shares in eco-harmful companies. Hence, I would expect to see higher prices for eco-friendly companies. The second hypothesis is positive environmental performance could increase the company’s profit and market value. This performance then increase the company’s stock price.
Advisor
Moledina, Amyaz
Department
Business Economics
Recommended Citation
Yu, Yiqun, "How does Environmental Performance Influence a Firm’s Stock Price?" (2020). Senior Independent Study Theses. Paper 8848.
https://openworks.wooster.edu/independentstudy/8848
Disciplines
Economics
Keywords
environmental performance, market value, Tobin’s q, CAPM model, externalities, utility
Publication Date
2020
Degree Granted
Bachelor of Arts
Document Type
Senior Independent Study Thesis
© Copyright 2020 Yiqun Yu