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Environmental pollution and sustainability of IPO performance: evidence from the Pakistani Market

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Abstract

This study examined the effect of air pollution on the initial return of IPOs in Pakistan. Cross-sectional data were used to examine 102 listed IPOs on Pakistan Stock Exchange between 1996 and 2019. Ordinary least squares and quantile least squares were employed to examine the influence of air pollution on IPO initial returns. Lastly, stepwise regression was utilised for additional analysis. According to the findings, in the presence of high air pollution, IPO initial returns also increase due to higher uncertainty. The findings demonstrate that air pollution intensifies a company’s information environment and financial uncertainty. Therefore, addressing environmental challenges is critical for both public health and capital formation. This study’s findings will increase companies’ awareness of the economic effect of air pollution, particularly in a country where air pollution is strictly regulated. This study provides businesses with an economic reason to reduce their pollution levels, and it can also help regulators pass environmental laws that are aimed at addressing this issue.

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Change history

  • 02 December 2022

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Authors and Affiliations

  1. School of Economics, Finance and Banking, Universiti Utara Malaysia, 06010, Sintok, Kedah, Malaysia

    Waqas Mehmood & Rasidah Mohd-Rashid

  2. Accounting Department, Faculty of Business Administration, (University of Tabuk), Tabuk, Saudi Arabia

    Ahnaf Ali Alsmady

  3. Department of Economics, Accounting and Finance, Oulu Business School, University of Oulu, 90570, Oulu, Finland

    Saqib Amin

  4. School of Business Management, Universiti Utara Malaysia, 06010, Sintok, Kedah, Malaysia

    Attia Aman-Ullah

Authors
  1. Waqas Mehmood
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  2. Ahnaf Ali Alsmady
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  3. Saqib Amin
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  4. Rasidah Mohd-Rashid
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  5. Attia Aman-Ullah
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Contributions

Waqas Mehmood (writing original draft and analysis)

Ahnaf Ali Alsmady (methodology writing and supervision)

Saqib Amin (review and edit)

Rasidah Mohd-Rashid (supervision)

Attia Aman-Ullah (review and edit)

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Correspondence to Waqas Mehmood.

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Mehmood, W., Alsmady, A.A., Amin, S. et al. Environmental pollution and sustainability of IPO performance: evidence from the Pakistani Market. Environ Sci Pollut Res 30, 30073–30086 (2023). https://doi.org/10.1007/s11356-022-23985-8

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