The Persistence of Green Goodwill



Civil coercion has its limitations; government regulation is only as effective as enforcement and investors base their estimates of firm value on information available from the firms themselves and from other secondary sources. While voluntary disclosure is construed as being selective or incomplete or both, negative nonfinancial news such as details of fines imposed for environmental violation is reflected in lower stock prices for a short duration. This chapter evaluates the persistence of goodwill capital for a sample of Indian companies from select industries, graded by their environmental performance. It is observed that investor concern differs across industries, and that the correlation of environmental performance with firm valuation is, at best, weak and short-lived. Periodic scrutiny and announcement of industry environmental performance by appropriately equipped independent agencies could help coordinate and sustain stakeholder pressure on industry.


Environmental Performance Abnormal Return Intangible Asset Voluntary Disclosure Announcement Date 
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Copyright information

© Springer India 2013

Authors and Affiliations

  1. 1.Verdurous Solutions Private LimitedMysoreIndia

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