Recently, the paper "Is Evil Rewarded with Evil? The Market Penalty Effect of Corporate Environmentally Irresponsible Events" participated by Cheng Chen (the second author, now a fresh post-graduate student of Accounting at the School of Business of Central South University), a 2019 undergraduate of the School of Business of Central South University, was accepted and published online by the important business journal Business Strategy and the Environment (SSCI District 1, ABS 3 stars, impact factor 6.381). The paper was completed under the guidance of Associate Professor Jin Youliang (first author) and teacher Zeng Huixiang (corresponding author) of the Accounting Department of the School of Business. The relevant conclusions are included in the 2019 undergraduate graduation thesis collection of the School of Business of Central South University.

This paper mainly examines the response of the capital market to corporate environmental failures, and the important governance mechanism of the capital market to corporate environmental responsibility. The paper uses the corporate environmental failure incidents of China’s environmentally sensitive industries from 2014 to 2018 as research samples, and uses the event research method to explore the punishment effect of the capital market from the mathematical and case empirical dimensions, and further explores the impact of corporate environmental failures in the capital Spillover effects of the market. Research shows that once the corporate environmental default incident is exposed, it will bring a significantly negative cumulative abnormal return in a short time window, and the difference in the nature of industry and property rights will cause significant differences in the duration and impact of the penalty effect; more interesting however, the capital market has significant industry spillover effects on the punishment of corporate environmental default incidents, but the penalties and spillover effects of different markets are different. This research finding not only confirms that the capital market's punishment mechanism for environmental breaches of responsibility can effectively restrain the environmental behavior of the enterprises involved and their respective industries, but also build an ecological environmental protection system for government departments to “coordinate and govern” with multiple entities, and provide a new way of thinking for giving full play to the punitive mechanism of the capital market to the enterprise's environmental responsibility behavior.

The research was supported by the National Natural Science Foundation of China. The acceptance of this paper demonstrates the high-quality achievements of the Business School of Central South University in the undergraduate cultivation system, and also reflects the ability and level of the accounting discipline to train undergraduates for high-level academic research.

Paper link：https://onlinelibrary.wiley.com/doi/abs/10.1002/bse.2403