Do green supply chain management initiatives impact stock prices of firms?

Authors:
Indranil Bose;Raktim Pal
Affiliations:
School of Business, The University of Hong Kong, Pokfulam Road, Hong Kong;College of Business, James Madison University, Showker Hall, MSC 0202, 800 South Main Street, Harrisonburg, VA 22807, USA
Venue:
Decision Support Systems
Year:
2012

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Abstract

Although firms have been taking green supply chain management (GSCM) initiatives, it is not known whether they create value for firms. We analyze 104 announcements related to GSCM using an event study, and determine what causes statistically significant gain in stock prices for these firms. Manufacturing firms, firms with high R&D expenses, and early adopters show a strong increase in stock prices on the day of the announcement. At the same time, small firms, firms not well-known for taking green initiatives, as well as firms that are low in growth potential considerably surprise the market when they make such announcements.