Corporate carbon emissions and market valuation of organic and inorganic investments

Gbenga Adamolekun, Nana Abena Kwansa and Frank Kwabi

Economics Letters, 2022, vol. 221, issue C

Abstract: We empirically examine the impact of a firm’s carbon emissions level on the market valuation of organic and inorganic investments. We document that the market reacts negatively to corporate investment announcements by companies with high carbon emissions levels. Further analysis indicates that the discount on market valuation is more pronounced for the set of organic investments, within which only asset acquisitions and product launches are negatively affected by the high carbon emissions level at the announcement.

Keywords: Carbon emissions; Market valuation; Organic investments announcements; Inorganic investment announcements (search for similar items in EconPapers)
JEL-codes: G30 G32 G34 Q51 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:221:y:2022:i:c:s0165176522003615

DOI: 10.1016/j.econlet.2022.110887

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