How Carbon Emission Affects Stock Returns and Business Management in China

Xitao Miao () and Nancy Li
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Xitao Miao: Xiamen University Tan Kah Kee College
Nancy Li: Xiamen University Tan Kah Kee College

A chapter in Proceedings of the 2022 2nd International Conference on Financial Management and Economic Transition (FMET 2022), 2023, pp 793-802 from Springer

Abstract: Abstract This article explores whether carbon emissions affect the cross-section of Chinese stock returns. We find firms that could better manage their carbon emission have higher stock returns compared to their peers. On the contrast, carbon emission of firms do not have a significant relationship with stock returns. Moreover, Carbon emissions will affect the company's business strategy. In addition, the relationship between stock returns and firms’ management ability of carbon emission is stronger among large firms. It indicates how firms manage their carbon emission might be more prominent for firm value and reputations among large firms, and it is already priced in the stock market.

Keywords: carbon emission; stock return; ESG; business management (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-054-1_86

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DOI: 10.2991/978-94-6463-054-1_86

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