TOXICS RELEASE INFORMATION - A POLICY TOOL FOR ENVIRONMENTAL-PROTECTION

This study examines investor reactions to the repeated public disclosu re of environmental information about firms in the chemical industry a nd the effectiveness of this information as a decentralized mechanism for deterring their pollution. By allowing investors to benchmark the performance of firms, repeated provision of the Toxics Release Invento ry led firms to incur statistically significant negative stock market returns during the one-day period following the disclosure of that inf ormation in the years 1990-1994. These losses had a significant negati ve impact on subsequent on-site toxic releases and a significant posit ive impact on wastes transferred off site, but their impact on total t oxic wastes generated by these firms is negligible, (C) 1998 Academic Press.