Seminar (Dept. of Finance)

Title: Supreme Court and the Value of Pollution: Evidence from West Virginia v. EPA

Speaker: Chenyu SHAN, Associate Professor, Shanghai University of Finance and Economics

Time: 10:00-11:30, Mar.30, 2023(Thursday)

Venue: Room 1007, Mingde Business Building

Language: Chinese & English

ABSTRACT:

We provide the first empirical investigation of the value relevance of court ruling on environmental litigation. In a unprecedented case, the U.S. Supreme Court cited the “major questions” doctrine to rule against the jurisdictic power of the Environmental Protection Agency (EPA) in the West Virginia V. EPA case. We find that stock prices of polluting firms increased relative to nonpolluting firms upon the announcement of the Supreme Court judgment on June 30, 2022. The stock price increase is most pronounced for firms located in states with more stringent environmental protection enforcement. Our findings suggest that court rulings affect investor perception on the value of polluting activities and firm policies.