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

Speaker: Dragon Yongjun Tang, Professor of Finance, The University of Hong Kong

Time: 10:00am-11:30am, March 8 (Beijing Time)

Location: 4-101

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.

About the speaker:

Prof. Dragon Yongjun TANG received his Ph.D. in finance from the University of Texas at Austin in 2005.  He also holds a B.S. from Jilin University, and M.S. from Texas A&M University.  Dragon joined The University of Hong Kong (HKU) in 2007, and became Associate Professor of Finance in 2013.  Before joining HKU, Dragon also held teaching positions at the University of Texas at Austin and Kennesaw State University.

Dragon’s current research interests include credit risk, credit derivatives, and Chinese banking and credit markets.  He has previously done research on mutual funds and Bayesian methods in finance.  His research articles are published in top journals such as the Journal of Finance and Journal of Financial Economics.  He has also received numerous research awards.

In HKU, Dragon was the Director of the Master of Finance Programme in 2012 – 2015, and has been the Associate Director of the Center for Financial Innovation and Development since 2013, and of the Center for China Financial Research since 2015.