Faculty Mentor
Dr. Diane Mollenkopf
Department (e.g. History, Chemistry, Finance, etc.)
Supply Chain Management
College (e.g. College of Engineering, College of Arts & Sciences, Haslam College of Business, etc.)
Haslam College of Business
Year
2018
Abstract
The purpose of this study is to determine if there is a differential impact on the financial performance of a company between environmental and social events.
This study uses a randomization of publicly traded companies within specific, pre-determined SIC codes, which is a collection of 66 companies, split between manufacturing and retail, to get the most accurate representation.
This study utilizes multiple regression models via STATA to analyze data compiled from the Wharton Research Database Services (WRDS) utilizing the MSCI ESG KLD, and Bloomberg, to analyze the percent increase in stock price which is the overarching models independent variable. Then, given the financial controls and dependent variables, an analysis was performed to give the output of the coefficient between environmental and social events to determine which has a greater impact on financial performance.
The results show statistically significant results across 6 different regressions. The study shows that across the board there is a differential impact between environmental and social events. The results are significant that environmental events have a bigger positive and negative effect on the change in stock price than do social events.
Included in
Business Analytics Commons, Environmental Indicators and Impact Assessment Commons, Finance and Financial Management Commons, Operations and Supply Chain Management Commons, Sustainability Commons
Supply Chain Sustainability: Understanding the Financial Impact
The purpose of this study is to determine if there is a differential impact on the financial performance of a company between environmental and social events.
This study uses a randomization of publicly traded companies within specific, pre-determined SIC codes, which is a collection of 66 companies, split between manufacturing and retail, to get the most accurate representation.
This study utilizes multiple regression models via STATA to analyze data compiled from the Wharton Research Database Services (WRDS) utilizing the MSCI ESG KLD, and Bloomberg, to analyze the percent increase in stock price which is the overarching models independent variable. Then, given the financial controls and dependent variables, an analysis was performed to give the output of the coefficient between environmental and social events to determine which has a greater impact on financial performance.
The results show statistically significant results across 6 different regressions. The study shows that across the board there is a differential impact between environmental and social events. The results are significant that environmental events have a bigger positive and negative effect on the change in stock price than do social events.