Environmental policies, national culture, and stock price crash risk: Evidence from renewable energy firms

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Yildiz Y., KARAN M. B.

BUSINESS STRATEGY AND THE ENVIRONMENT, vol.29, no.6, pp.2374-2391, 2020 (SSCI) identifier identifier

  • Publication Type: Article / Article
  • Volume: 29 Issue: 6
  • Publication Date: 2020
  • Doi Number: 10.1002/bse.2508
  • Journal Indexes: Social Sciences Citation Index (SSCI), Scopus, International Bibliography of Social Sciences, ABI/INFORM, Aerospace Database, Agricultural & Environmental Science Database, Business Source Elite, Business Source Premier, Communication Abstracts, Environment Index, Geobase, Greenfile, INSPEC, Metadex, Pollution Abstracts, Psycinfo, Public Affairs Index, Civil Engineering Abstracts
  • Page Numbers: pp.2374-2391
  • Keywords: stock price crash risk, renewable energy firms, environmental policy, national culture, energy sector, CORPORATE SOCIAL-RESPONSIBILITY, FINANCIAL PERFORMANCE, OIL PRICES, MARKET, IMPACT, DIMENSIONS, MOMENTUM
  • Hacettepe University Affiliated: Yes


This study investigates the impact of country-level environmental performance and national culture on the stock price crash risk of renewable energy firms. Employing a large sample of 626 renewable energy firms across 31 countries, we find a significant nonlinear relationship between country-level environmental performance and crash risk. National culture dimensions are found to strongly predict the crash risk of renewable energy firms, particularly after the global financial crisis. On the contrary, national culture dimensions and environmental policies are observed to not exert any significance in explaining the crash risk of fossil fuel firms. Our results are robust with respect to alternative measures of stock price crash risk and the endogeneity of national culture dimensions. Overall, the findings of this paper contribute to the environmental economics literature by providing new evidence regarding the role of societal and environmental factors in explaining the stock price crash risk of energy firms.