Analysis of the relationship between investment inefficiency and climate risk and the moderating effects of managerial ownership

Su-In Kim and Yujin Kim ()
Additional contact information
Su-In Kim: Hongik University
Yujin Kim: Hana Institute of Finance

Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, 2023, vol. 25, issue 9, No 17, 9337-9358

Abstract: Abstract This study examines the relationship between investment inefficiency and climate risk and the moderating effects of managerial ownership on this relationship of Korean companies. Previous studies have focused on the relationship between climate risk and firm value using disclosure information related to climate risk. In contrast, we directly measure climate risk using actual greenhouse gas emissions and energy consumption data released by Korean companies. We find that the higher is the investment inefficiency, the higher is the climate risk, and the higher is the managerial ownership, the lower is the climate risk. In addition, we find that managerial ownership weakens the positive relationship between investment inefficiency and climate risk. This study suggests alternatives to reduce climate risk through efficient investment, as opposed to simple, large-scale investment in facilities, and emphasizes the role of managerial ownership in the management strategies to reduce climate risk with the goal of enhancing firm value.

Keywords: Investment inefficiency; Climate risk; Managerial ownership; Greenhouse gas emissions; Energy consumption (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://link.springer.com/10.1007/s10668-022-02438-9 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:endesu:v:25:y:2023:i:9:d:10.1007_s10668-022-02438-9

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/10668

DOI: 10.1007/s10668-022-02438-9

Access Statistics for this article

Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development is currently edited by Luc Hens

More articles in Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().