Uncertainty Associated with Future Environmental Costs and the Market’s Differential Response to Earnings Information
研究环境不确定性如何影响投资者对高污染与低污染企业盈利信息的敏感度，发现高污染企业在环境不确定性高时盈利反应系数显著更高。
This study examines whether the uncertainty arising from a firm’s exposure to future environmental costs (environmental uncertainty) affects the market’s price sensitivity to reported earnings. Specifically, when environmental uncertainty is significantly high, are investors more responsive to reported earnings released by ‘high‐polluting’ firms than reported earnings announced by ‘low‐polluting’ firms within the same industry? The initial impact of Title IV (the acid rain provisions) of the 1990 Clean Air Act Amendments (1990 CAAA) on the US electric utility industry provides the research setting required to isolate the effects of environmental uncertainty while addressing this question. Consistent with theoretical predictions, we find that the earnings response coefficients (ERCs) of high‐polluting electric utilities are significantly greater than those of their low‐polluting counterparts during a predicted period of elevated environmental uncertainty. In adjoining sample years associated with lower environmental uncertainty, we observe no statistical difference in the magnitude of the ERCs between these two groups. In addition, the study’s findings suggest that the magnitude of the ERC is increasing in the firm’s exposure to future environmental costs, after controlling for other factors that potentially affect ERCs.