Journal of Business Ethics

, Volume 140, Issue 3, pp 455–476

The Effect of Environmental Activism on the Long-run Market Value of a Company: A Case Study



This paper investigates the impact of activism on a large, powerful corporation in Tasmania. Gunns Ltd was a large woodchip processor in Tasmania that fought a long-running battle with environmental activists regarding Gunns’ logging and processing activities. The study focuses on events in 2004–2005, when Gunns applied to build a pulp mill in rural northern Tasmania and began a legal case against activists. The research question is whether there is clear statistical evidence that these events were important, as is widely believed, in the ultimate failure of Gunns in (Annual Report 2011, Gunns Ltd, Tasmania, available from: [11/04/14]), just 6 years after being the largest and one of the most financially successful Tasmanian companies. We use a mixed methods approach that combines a detailed narrative informed by theory, to examine issues of corporate social responsibility (CSR) and ethical behaviour, with an econometric time series analysis of the impact of activism on the market value of Gunns. Our analysis supports the contention that the events in 2004–2005 played a significant part in the decline of the long-run market value of Gunns over the subsequent period, through to its failure in 2011. We discuss the underlying causes for Gunns’ failure in terms of agency, stakeholder, legitimacy and leadership theories. Research frequently assesses effects such as those in the Gunns’ case through solely qualitative means. This paper integrates a quantitative analysis into a detailed qualitative narrative and theoretical interpretation of events, to provide additional precision to its findings. It contributes to research in CSR and the impact of activism.


Activism Corporate social responsibility Gunns Mixed methods Ethical management Error correction modelling 



Australian Bureau of Statistics


Augmented Dickey-Fuller


Autoregressive distributed Lag model


Australian stock exchange


Corporate social responsibility


Error correction model


Error correction term


Global financial crisis


Resource planning and development commission


Tap into a better Tasmania


Tasmanian wilderness society


Victorian supreme court

Copyright information

© Springer Science+Business Media Dordrecht 2015

Authors and Affiliations

  1. 1.Tasmanian School of Business & EconomicUniversity of TasmaniaLauncestonAustralia
  2. 2.Tasmanian School of Business & EconomicUniversity of TasmaniaHobartAustralia

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