Stock Market Reactions to Auto Manufacturers’ Environmental Failures
The automotive sector must meet strict regulations to increase mobility while reducing emissions to demonstrate environmental stewardship. Trust in the promise of a sustainable Fahrvergnügen was broken with recent scandals like Dieselgate denting the confidence of regulators and consumers. Overpromi...
| Main Authors: | , , , , |
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| Format: | Journal Article |
| Published: |
Sage Publications
2018
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| Online Access: | http://hdl.handle.net/20.500.11937/69770 |
| _version_ | 1848762130341298176 |
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| author | Wood, Lincoln Wang, J. Duong, L. Reiners, Torsten Smith, R. |
| author_facet | Wood, Lincoln Wang, J. Duong, L. Reiners, Torsten Smith, R. |
| author_sort | Wood, Lincoln |
| building | Curtin Institutional Repository |
| collection | Online Access |
| description | The automotive sector must meet strict regulations to increase mobility while reducing emissions to demonstrate environmental stewardship. Trust in the promise of a sustainable Fahrvergnügen was broken with recent scandals like Dieselgate denting the confidence of regulators and consumers. Overpromising on sustainable innovative technology resulted in unethical behavior, deceit, and failure to meet promised standards. We consider to what extent societal disapproval was evident in the stock market reaction to these events. We sampled 41 announcements (1984 to 2016) and observed a mean stock market reaction of -1.01%. There was no difference in the stock reaction in firms failing governmental vs. voluntary standards and more negative reactions for events following Dieselgate or when compensation was offered. The severity of the reaction to unethical misuse of environmental credentials should encourage maintaining promised environmental performances as a macromarketing strategy. |
| first_indexed | 2025-11-14T10:42:40Z |
| format | Journal Article |
| id | curtin-20.500.11937-69770 |
| institution | Curtin University Malaysia |
| institution_category | Local University |
| last_indexed | 2025-11-14T10:42:40Z |
| publishDate | 2018 |
| publisher | Sage Publications |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | curtin-20.500.11937-697702019-01-30T23:48:31Z Stock Market Reactions to Auto Manufacturers’ Environmental Failures Wood, Lincoln Wang, J. Duong, L. Reiners, Torsten Smith, R. The automotive sector must meet strict regulations to increase mobility while reducing emissions to demonstrate environmental stewardship. Trust in the promise of a sustainable Fahrvergnügen was broken with recent scandals like Dieselgate denting the confidence of regulators and consumers. Overpromising on sustainable innovative technology resulted in unethical behavior, deceit, and failure to meet promised standards. We consider to what extent societal disapproval was evident in the stock market reaction to these events. We sampled 41 announcements (1984 to 2016) and observed a mean stock market reaction of -1.01%. There was no difference in the stock reaction in firms failing governmental vs. voluntary standards and more negative reactions for events following Dieselgate or when compensation was offered. The severity of the reaction to unethical misuse of environmental credentials should encourage maintaining promised environmental performances as a macromarketing strategy. 2018 Journal Article http://hdl.handle.net/20.500.11937/69770 10.1177/0276146718781915 Sage Publications fulltext |
| spellingShingle | Wood, Lincoln Wang, J. Duong, L. Reiners, Torsten Smith, R. Stock Market Reactions to Auto Manufacturers’ Environmental Failures |
| title | Stock Market Reactions to Auto Manufacturers’ Environmental Failures |
| title_full | Stock Market Reactions to Auto Manufacturers’ Environmental Failures |
| title_fullStr | Stock Market Reactions to Auto Manufacturers’ Environmental Failures |
| title_full_unstemmed | Stock Market Reactions to Auto Manufacturers’ Environmental Failures |
| title_short | Stock Market Reactions to Auto Manufacturers’ Environmental Failures |
| title_sort | stock market reactions to auto manufacturers’ environmental failures |
| url | http://hdl.handle.net/20.500.11937/69770 |