The impact of environmental protection standards on the automobile capital market
-- An Event Study Based on "China VI" Emission Standards
DOI:
https://doi.org/10.54691/bcpbm.v25i.1898Keywords:
“China VI” Emission Standards, Event Study, Multiple Regression, Cumulative Abnormal ReturnsAbstract
The "China VI" emission standards put forward higher requirements for technological innovation and source pollution control in the automotive industry. This paper uses event study methodology and multiple regression model to explore the impact of the promulgation of the "China VI" emission standards on the stock price of the auto industry. The study found that: (1) the promulgation of the "China VI" emission standards with the characteristics of command-and-control environmental regulation has produced a beneficial boost to stock returns; (2) the effect is heterogeneous in the upstream, midstream and downstream industries of automobiles, and the nature of enterprises’ property rights. (3) The solvency, development ability, and profitability of an enterprise are the key factors that affect the cumulative abnormal rate of return. Based on this, this paper puts forward policy suggestions such as paying attention to the capital market effect of command-and-control regulation.
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