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Effect of Air Pollution on the Stock Yield of Heavy Pollution Enterprises in China’s Key Control Cities Under Climate Change

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Economic Impacts and Emergency Management of Disasters in China

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Abstract

Under the background of climate change, the haze days in China have increased significantly, which seriously hinders the sustainable development of society and arouses wide attention from the public. However, the researches on the effect of air pollution on the stock yield of heavy pollution enterprise in key control cities are quite limited. Thus, this paper collects the AQI (air quality index) of key control cities (over prefecture-level) in China and the stock yields of listed heavy pollution enterprises in these cities from 2011 to 2016, and through multi-discontinuities regression model, testes the effect of air pollution on the stock yield of heavy pollution enterprise. The results show that: (1) severe air pollution (AQI = 300) has a significant negative influence on stock yield and the results are robust; (2) there is a time effect in the influence of air pollution on stock yield and the negative influence has become significant since 2013. This paper gives a brief discussion on the cause of it and suggests that severe air pollution should be strictly controlled. Only by facing air pollution seriously, can we eliminate air pollution with collective wisdom and concerted efforts and achieve the sustainable development of city. Being the first study to look into the effect of air pollution on stock yield in key control cities in China, this paper provides empirical reference for government supervision departments, stock investors as well as enterprises.

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Notes

  1. 1.

    https://www.healtheffects.org/Internationl/GBD-Press-Release.pdf.

  2. 2.

    Website: https://datacenter.mep.gov.cn/report/air.daily/air.dairy_api.jsp.

  3. 3.

    According to the Notice on Special Emission Limits on Air Pollutants, the six industries in major monitoring areas include thermal power industry, iron and steel industry, petrochemical industry, cement industry, non-ferrous metals industry, and chemical industry. The key control area contains 19 provinces (autonomous regions/municipalities). They are Beijing, Tianjin, Hebei, Shanghai, Jiangsu, Zhejiang, Guangdong, Liaoning, Shandong, Hubei, Hunan, Chongqing, Sichuan Province, Fujian, Shanxi, Shaanxi, Gansu, Ningxia, and Xinjiang.

  4. 4.

    According to the Industry Classification Standard for Listed Company (2012 Edition) issued by China Securities Regulatory Commission, the above six industries are further divided into 12 sub-industries: B07 (petroleum and natural gas extraction), B08 (ferrous metal mining), B09 (nonferrous metal mining), C19 (leather and fur products and shoes), C25 (petroleum processing, coking, and nuclear fuel processing), C26 (manufacture of chemical raw materials and chemicals), C28 (manufacture of chemical fibers), C29 (rubber and plastics products), C30 (manufacture of non-metallic mineral), C31 (ferrous metal smelting and rolling), C32 (Non-ferrous metal smelting and rolling), and D44 (production and supply of electricity and heat).

  5. 5.

    The bandwidths of the last two Discontinuities 200 and 300 are 50.

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Acknowledgements

Shanshan Chen, Ge Gao, Yanmin Liu also made great contributions to this manuscript. We express our heartfelt thanks to them. This research was supported by: National Social and Scientific Fund Program of China (18ZDA052; 17BGL142; 16ZDA047); The Natural Science Foundation of China (91546117, 71373131).

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  1. School of Economics and Management, Shanghai Maritime University, Shanghai, China

    Prof. Xianhua Wu & Prof. Ji Guo

  2. Collaborative Innovation Center on Climate and Meteorological Disasters, Nanjing University of Information Science and Technology, Nanjing, China

    Prof. Xianhua Wu & Prof. Ji Guo

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Wu, X., Guo, J. (2021). Effect of Air Pollution on the Stock Yield of Heavy Pollution Enterprises in China’s Key Control Cities Under Climate Change. In: Economic Impacts and Emergency Management of Disasters in China. Springer, Singapore. https://doi.org/10.1007/978-981-16-1319-7_15

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