How Do Sustainability Stakeholders Seize Climate Risk Premia in the Private Cleantech Sector?

Lingyu Li and Xianrong Zheng ()
Additional contact information
Lingyu Li: Charlton College of Business, University of Massachusetts Dartmouth, North Dartmouth, MA 02747, USA
Xianrong Zheng: Information Technology & Decision Sciences Department, Old Dominion University, Norfolk, VA 23529, USA

JRFM, 2023, vol. 16, issue 3, 1-22

Abstract: This paper explores the strategies and practices of capturing climate risk premia for venture capital (VC) fund managers and entrepreneurs in the private cleantech sector. It also examines the impact of the feed-in tariffs (FITs) policy on the management of cleantech investments. It is shown that a longer investment period, less investment capital in cleantech investment management strategies, and optimistic climate risk management practices will help investors to better capture climate risk premia. In fact, the FITs policy will give rise to VC fund managers and entrepreneurs having a positive view regarding the prospects of the cleantech sector, motivating them to make long-term investments. Furthermore, it is shown that the greater the impact of the FITs policy, the greater the climate risk premia to be captured. In addition, the captured climate risk premia are greater in weaker economic conditions and in times of increased uncertainty with regard to product demand.

Keywords: cleantech innovation; climate risk; feed-in tariffs policy; venture capital investment performance (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/1911-8074/16/3/153/pdf (application/pdf)
https://www.mdpi.com/1911-8074/16/3/153/ (text/html)

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:gam:jjrfmx:v:16:y:2023:i:3:p:153-:d:1082096

Access Statistics for this article

JRFM is currently edited by Ms. Chelthy Cheng

More articles in JRFM from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().