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- Title
The Impact of Forest Certification on Firm Financial Performance in Canada and the U.S.
- Authors
Bouslah, Kais; M'Zali, Bouchra; Turcotte, Marie-France; Kooli, Maher
- Abstract
The purpose of this article is to examine empirically the impact of environmental certification on firm financial performance (FP). The main question is whether there is a 'green premium' for certified firms, and, if so, for what kind of certification. We analyze the short-run and the long-run stock price performance using an event-study methodology on a sample of Canadian and U.S. firms. The results of short-run event abnormal returns indicate that forest certification does not have any significant impact on firm FP regardless of the certification system carried out by firms. Unlike the short-run results, the long-run post-event abnormal returns suggest that forest certification has, on average, a negative impact on firm FP. However, the impact of forest certification on firm FP depends on who grants the certification, since only industry-led certification (Sustainable Forestry Initiative, Canadian Standards Association and ISO14001) are penalized by financial markets, whereas non-governmental organizations-led Forest Stewardship Council certification is not.
- Subjects
UNITED States; CANADA; ENVIRONMENTAL policy; CERTIFICATION; FINANCIAL performance; GREEN marketing; METHODOLOGY
- Publication
Journal of Business Ethics, 2010, Vol 96, Issue 4, p551
- ISSN
0167-4544
- Publication type
Article
- DOI
10.1007/s10551-010-0482-5