The environmental and macroeconomic effects of socially responsible investment

Lammertjan Dam and Ben Heijdra ()

Journal of Economic Dynamics and Control, 2011, vol. 35, issue 9, 1424-1434

Abstract: We analyze the effects of socially responsible investment and public abatement on environmental quality and the economy in a continuous-time dynamic growth model featuring optimizing households and firms. Environmental quality is modeled as a renewable resource. Consumers can invest in government bonds or firm equity. Since investors feel partly responsible for environmental pollution when holding firm equity, they require a premium on the return to equity. We show that socially responsible investment behavior by households partially offsets the positive effects on environmental quality of public abatement policies.

Keywords: Socially; responsible; investment; Economic; growth; Environmental; economics; Resource; dynamics; Stock; market (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165188911000856
Full text for ScienceDirect subscribers only

Related works:
Working Paper: The environmental and macroeconomic effects of socially responsible investment (2011)
Working Paper: The Environmental and Macroeconomic Effects of Socially Responsible Investment (2008)
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:eee:dyncon:v:35:y:2011:i:9:p:1424-1434

Access Statistics for this article

Journal of Economic Dynamics and Control is currently edited by J. Bullard, C. Chiarella, H. Dawid, C. H. Hommes, P. Klein and C. Otrok

More articles in Journal of Economic Dynamics and Control from Elsevier
Bibliographic data for series maintained by Catherine Liu ().