Institutional Investors, Climate Policy Risk, and Directed Innovation

Marie-Theres von Schickfus

No 356, ifo Working Paper Series from ifo Institute - Leibniz Institute for Economic Research at the University of Munich

Abstract: The tightening of climate policies may cause technologies based on fossil fuels to lose value compared to “green” technologies. For firms with significant fossil-based knowledge, this implies that their firm (market) value is at risk. This technological risk is also relevant for financial market actors, in particular institutional investors following long-term investment strategies. Measuring technological knowledge using patent data at the firm level, this paper uses a dynamic patent count data model and explores whether institutional investors address technological transition risk via engagement activities. Despite robust evidence for a positive influence of institutional investors on overall innovation, no evidence can be found that institutional ownership is associated with a change in the direction of innovation.

Keywords: Green innovation; climate policy; green finance; climate risk; institutional investors (search for similar items in EconPapers)
JEL-codes: G23 O34 Q55 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-cfn, nep-cwa, nep-ene, nep-env, nep-sbm and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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