Investment performance of "environmentally-friendly" firms and their initial public offers and seasoned equity offers

Authors

Pak To Chan, The Hong Kong University of Science And Technology
Terry S. Walter, University of SydneyFollow

RIS ID

114873

Publication Details

Chan, P. & Walter, T. (2014). Investment performance of "environmentally-friendly" firms and their initial public offers and seasoned equity offers. Journal of Banking and Finance, 44 (1), 177-188.

Abstract

We employ a sample of 748 environmentally-friendly (or "green") firms listed on U.S. stock exchanges to extend studies of the effects of socially responsible investment (SRI) on stock investment returns and the performance of initial public offerings (IPOs) and seasoned equity offerings (SEOs). Our empirical tests document positive and statistically significant excess returns for our environmentally-friendly firms and their IPOs and SEOs, in contrast to our control IPO and SEO samples which underperform. In summary, a "green" equity premium is evident in returns calculated from a variety of benchmarks.