Green Firms, Environmental Hazards, and Investment

Tommaso Oliviero (), Sandro Rondinella and Alberto Zazzaro ()
Additional contact information
Sandro Rondinella: Department of Economics and Statistics, University of Naples Federico II, 80126 Napoli, Italy

Sustainability, 2024, vol. 16, issue 2, 1-21

Abstract: In this work, we analyze the relation between environmental risks and firms’ investments, and whether this relationship is different for green firms. We merge balance sheet and patenting activity data on Italian firms in manufacturing sectors during the period 2010–2019 with information on environmental risk at the municipality level. We show that investments in capital assets are smaller on average for firms operating in municipalities with higher levels of environmental risk, particularly when the risk is hydrogeological or seismic in nature. This negative impact is significantly lower if firms operate in green sectors. This finding was reinforced after the ratification of the Paris Agreement and the consequent increased awareness of firms, investors, and policymakers about the importance of environmental risks and the ongoing ecological transition process.

Keywords: green investment; environmental risk; sustainability (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.mdpi.com/2071-1050/16/2/542/pdf (application/pdf)
https://www.mdpi.com/2071-1050/16/2/542/ (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:jsusta:v:16:y:2024:i:2:p:542-:d:1315284

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

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