Time: 14:00-15:00, 24 March 2026
Speaker: Cheng Yin is an Assistant Professor in the Department of Accounting at Tsinghua University. His research covers capital market information disclosure, ESG disclosure, cost management, and corporate governance. His papers have been published in Journal of Business Ethics, Journal of Management, Journal of Accounting, Auditing & Finance, Journal of Information Systems, and Strategic Science. He has reviewed for academic journals including Journal of Management, Organization Science, and Contemporary Accounting Research, and leads one National Natural Science Foundation of China Young Scholars project.
Abstract:
Although exceeding financial performance targets usually triggers positive investor reactions, the market response to above-target environmental performance (ATEP) - firms exceeding their self-set pollution reduction targets - remains theoretically unclear. This study fills this gap through an abductive exploratory analysis of U.S. listed firms from 2007 to 2019.
We find that, under normal conditions, investors largely ignore above-target environmental performance. However, during pollution incidents, above-target environmental performance backfires: firms with greater above-target performance face more severe market penalties. This negative effect is amplified for firms held by socially responsible investors and for firms whose above-target environmental performance is certified by executives. Moreover, penalized firms subsequently reduce reported above-target environmental performance and increase the ambiguity of target disclosures.
These findings show that investor attention to environmental performance is context dependent and highlight a dynamic feedback loop between market responses and corporate environmental governance, offering implications for managers and policymakers.
