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October 20, 2025Journal of Capital Markets Studies

From green claims to market crashes: the moderating forces of climate risk

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Authors

IAIsnaini Nuzula AgustinCCCandy CandyJWJervis William

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Overview

This study finds greenwashing increases stock price crash risk in Indonesian firms, indicating that climate risk amplifies this effect.

Key Points

  • Greenwashing significantly increases stock price crash risk in firms, leading to market instability.
  • Companies with inflated environmental claims face higher crash risks, especially under high climate risk conditions.
  • Ordinary least squares method reveals strong correlations between greenwashing and stock performance in Indonesia.
  • Strengthening ESG reporting is essential for both regulators and investors to mitigate greenwashing risks.

Cite This Study

Agustin et al. (2025) studied this question.

synapsesocial.com/papers/68f5a78aab63786de5b45fefhttps://doi.org/10.1108/jcms-06-2025-0069
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Also Consider

Synapse has enriched 5 closely related papers on similar clinical questions. Consider them for comparative context:

  1. 1Analysis of Greenwashing Measurement on Internal Company Factors in Indonesia2025
  2. 2Narcissistic greenwashing: a cross-country evidence on the divergent paths to stock price crash risk2026
  3. 3Corporate Climate Risk and Greenwashing Behaviour: Evidence From China2026 · 2 citations
  4. 4The combined impact of ESG and Sharia compliance in mitigating stock price crash risk2025
  5. 5Green corporate governance and stock price crash risk: evidence from an emerging market2026