Talking trash: legitimacy, impression management, and unsystematic risk in the context of the natural environment

Pratima Bansal, Iain Clelland

Research output: Contribution to journalArticleResearchpeer-review

849 Citations (Scopus)


Applying institutional theory, we argue that environmentally legitimate firms incur less unsystematic stock market risk than illegitimate firms. Firms earn environmental legitimacy when their performance with respect to the natural environment conforms to stakeholders' expectations. This relationship was supported with the analysis of media reports and stock prices of 100 firms over a five-year period. The analysis also showed that firms with low environmental legitimacy can attenuate this effect by expressing commitment to the natural environment.

Original languageEnglish
Pages (from-to)93-103
Number of pages11
JournalAcademy of Management Journal
Issue number1
Publication statusPublished - Feb 2004
Externally publishedYes

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