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| Author: | Konar, S. Cohen, M. A. |
| Title: | Does the market value environmental performance? |
| Journal: | Review of Economics and Statistics
2001 : MAY, VOL. 83:2, p. 281-289 |
| Index terms: | ENVIRONMENT INTANGIBLE ASSETS COMPANIES |
| Language: | eng |
| Abstract: | The authors report on a study that relates the market value of firms in the S&P 500 to objective measures of their environmental performance. After controlling for variables traditionally thought to explain firm-level financial performance, the authors find that bad environmental performance is negatively correlated with the intangible asset value of firms. The average "intangible liability" for firms in the authors' sample is $380 million - approximately 9% of the replacement value of tangible assets. The authors conclude that legally emitted toxic chemicals have a significant effect on the intangible asset value of publicly traded companies. A 10% reduction in emissions of toxic chemicals results in a $34 million increase in market value. |
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