Investor Response to the Exxon Valdez Oil Spill

This study examines the impact of the 1989 Exxon Valdez Oil spill on investment returns to shareholders in two different groups of firms: firms within the oil industry and a sample of unrelated firms with environmental reputation rankings. Within the oil industry, the effects of the spill were strongly negative and idiosyncratic to the exxon corporation. Within the sample of unrelated firms, companies with an exemplary reputation for environmentally responsible behavior earned significantly positive abnormal returns, while companies with neutral or negative environmental reputations showed no response. These latter findings support a proactive approach to corporate environmental management and endorse the role of corporations in achieving a sustainable society.

White, Mark. "Investor Response to the Exxon Valdez Oil Spill." University of Virginia Online Scholarship Initiative (1996).

Originally published at http://etext.lib.virginia.edu/osi/