The Effect of CO 2 Gas Emissions on the Market Value, Price and Shares Returns

Mahdi Salehi (), Seyed Hamed Fahimifard, Grzegorz Zimon (), Andrzej Bujak and Adam Sadowski
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Mahdi Salehi: Department of Economics and Administrative Sciences, Ferdowsi University of Mashhad, Mashhad 9177948974, Iran
Seyed Hamed Fahimifard: Department of Economics and Administrative Sciences, Ferdowsi University of Mashhad, Mashhad 9177948974, Iran
Grzegorz Zimon: Department of Finance, Banking, and Accountancy, The Faculty of Management, Rzeszow University of Technology, 35-959 Rzeszow, Poland
Andrzej Bujak: Department of Finance and Managament, WSB University in Wrocław, Fabryczna Street 29-31, 53-609 Wrocław, Poland
Adam Sadowski: Department of Strategy and Value-Based Management, University of Lodz, 22/26 Matejki Street, 90-237 Lodz, Poland

Energies, 2022, vol. 15, issue 23, 1-17

Abstract: One thing that should be considered in environmental considerations and climate change is the transportation sector’s contribution to producing carbon dioxide. Unfortunately, in developing countries such as Iran, due to high tariff support, manufacturers have no incentive to improve the combustion quality of their products. Most likely, significant restrictions on CO 2 emissions will be applied in the coming years, and companies whose activities or products are related to high-level greenhouse gas emissions will be affected by these restrictions. Therefore, due to the application of these restrictions, investors are most concerned about the risk associated with the return of purchased shares. Considering these cases, it can be expected that the risk related to carbon emissions will be reflected in the yield level and, thus, the stock price. Therefore, the present study deals with the effect of CO 2 gas emissions on the market value, price and stock returns of Iranian automobile companies. The data collected as tabular data include six automobile companies from 2018–2019. By conducting various tests and panel data estimations, especially the dynamic panel data method, it was determined that CO 2 emissions reduce stock prices, returns and market value of automobile companies. In addition, the results of the causality test indicate that the direction of causality is only from CO 2 emissions to stock returns.

Keywords: market value; stock price; stock yield; CO 2 emissions; dynamic panel data (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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