Pricing Green in a Red Turn

Sammanfattning

This study examines whether environmental performance and Republican political alignment explain abnormal returns around the 2024 U.S. election, and whether political alignment moderates this relationship. The results show positive aggregate abnormal returns around the election. Firms with higher environmental performance experienced lower cumulative abnormal returns, suggesting that investors reassessed its value under an expected shift toward weaker environmental regulation. Stronger Republican political alignment, based on donations, was associated with more favorable market reactions, particularly on the event day. The study finds no evidence that political alignment moderated the relationship between environmental performance and abnormal returns.