Carbon neutral announcements and Chinese stock market reaction: a supply chain network-based perspective

Abstract

PurposeThis study aims to explore the impact of carbon neutral announcements on “stock market value” of publicly listed companies in China.Design/methodology/approachThe event study approach is adopted. Market, market-adjusted, Carhart four-factor model and a cross-sectional regression model are employed to examine the impacts of carbon neutral announcements on “stock market value” of Chinese companies based on data from 188 carbon neutral announcements.FindingsCarbon neutral announcements positively impact Chinese shareholder value. Carbon neutral announcements at the strategic level have a more positive and significant impact on Chinese stock market value. Innovative carbon neutral announcements do not significantly cause Chinese stock market reactions. Companies have more positive and significant stock market reactions when the companies make carbon neutral announcements that reflect high supply chain network resilience and heterogeneity and strong supply chain network relationships.Practical implicationsThe findings uncover the business value of carbon neutral activities and provide operations managers in developing countries insights into how to improve enterprises' market value by actively implementing carbon neutral activities.Originality/valueThis paper is the first trial to apply an event study to examine the relationship between carbon neutral announcements and Chinese stock market value from the perspective of announcement level and type and supply chain networks. This paper introduces corporate reputation theory and enriches the application of corporate reputation theory in the field of low-carbon environmental protections and supply chains.

An Expert System to Evaluate the Impacts of Health, Safety, and Environment System Implementation on Firms' Financial Performance Using Analytic Network Process and Promethee Techniques

“…Given that financial objectives stand at the forefront of priorities for economic entities, it becomes imperative to subject the expenses associated with green and low-carbon activities to a thorough cost-effectiveness analysis or financial evaluation. This evaluation is essential because the response of stakeholders and the capital market to such expenditures, as demonstrated in the research conducted by Liu et al (2023b), are not always positive.…”

“…The findings revealed a significant negative stock market reaction. However, customer concentration and the adoption of smart supply chains exerted a substantial mitigating influence on this negative outcome (Liu et al, 2023b).…”