The Reputational Penalties for Environmental Violations
Empirical Evidence
Bibliographic Data
| ID | 23315531 |
|---|---|
| Authors | Jonathan M Karpoff (0000-0002-5981-8320, University of Washington), John R Lott, Jr John R Lott, Eric W Wehrly (Western Washington University) |
| Year | 2005 |
| Volume | 48 |
| Issue | 2 |
| Pages | 653-675 |
| Publication date | 2005-10-01 |
| Peer Reviewed | Yes |
| Open Access | No |
| Type | ARTICLE |
| Venue | The Journal of Law and Economics (JOURNAL) |
| Journal identifiers | ISSN: 0022-2186 • E-ISSN: 1537-5285 |
| Publisher | University of Chicago Press (PUBLISHER • US) |
| DOI | 10.1086/430806 |
| OpenAlex | W2119104230 |
| Language | EN |
| Citations received | 53 |
| References cited | 36 |
This paper examines the sizes of the fines, damage awards, remediation costs, and market value losses imposed on companies that violate environmental regulations. Firms that violate environmental laws suffer statistically significant losses in the market value of firm equity. The losses, however, are of similar magnitudes to the legal penalties imposed, and in the cross section, the market value loss is related to the size of the legal penalty. Thus, environmental violations are disciplined largely through legal and regulatory penalties, not through reputational penalties.
Business · Economics · Equity (law) · Market failure · Market value · Microeconomics · Natural resource economics · Value (mathematics) · Finance · Law · Law, Economics, and Judicial Systems · Regulation and Compliance Studies · Wildlife Conservation and Criminology Analyses
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| Unique citing works | 53 |
|---|---|
| Citations per year | 2,94 |
| Citation span | 2008 - 2026 (19) |
| Citation velocity | current |
| Highly cited | No |
| Citation types | Neutral: 53 |