Environmental information provision, market valuation, and firm incentives: An empirical study of the Japanese PRTR system

Akira Hibiki, Shunsuke Managi

Research output: Contribution to journalArticle

21 Citations (Scopus)


The environmental performance of a listed firm could affect its level of investment in pollution prevention and its access to financial markets. Previous studies using Tobin's q that explore market response to environmental performance do not distinguish between the impact of performance on investment and market response, which may mislead conclusions. To overcome this problem, we simultaneously estimate the functions of the intangible asset, the replacement cost, and the toxic chemical risk. We find that the Japanese financial market does not value risk associated with toxic chemical releases. Nevertheless, even without market valuation, firms increase investment to reduce pollution.

Original languageEnglish
Pages (from-to)382-393
Number of pages12
JournalLand Economics
Issue number2
Publication statusPublished - May 2010
Externally publishedYes


All Science Journal Classification (ASJC) codes

  • Economics and Econometrics
  • Environmental Science (miscellaneous)

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