Elephant and Ant: Do Equity Investors Care About Firm's Carbon Emission?

Yangmengchi Ding ()
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Yangmengchi Ding: Princeton University

A chapter in New Perspectives and Paradigms in Applied Economics and Business, 2023, pp 31-47 from Springer

Abstract: Abstract This paper investigates whether investors in the US market are concerned about corporate carbon emissions. We find that carbon emissions can predict future stock return only for firms in the high-emission industries. The analysis method used continues the single ranking method of Fama French. The results indicate that investors care more about carbon emissions for dirty companies. To provide further evidence for investors’ attention channel, we find that the relationship between carbon emissions and future stock returns is significant only after 2016, when the Paris Agreement was signed and investors began to pay attention to climate change.

Keywords: Carbon emissions; Stock return; Industry code (SIC); Investor attention (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-031-23844-4_3

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DOI: 10.1007/978-3-031-23844-4_3

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