The Environmental and Macroeconomic Effects of Socially Responsible Investment

Lammertjan Dam and Ben Heijdra ()

No 2349, CESifo Working Paper Series from CESifo

Abstract: We analyze the effects of socially responsible investment and public abatement on environmental quality and the economy in a continuous-time dynamic growth model featuring optimizing households and firms. Environmental quality is modelled as a renewable resource. Consumers can invest in government bonds or firm equity. Since investors feel partly responsible for environmental pollution when holding firm equity, they require a premium on the return to equity. We show that socially responsible investment behaviour by households partially offsets the positive effects on environmental quality of public abatement policies.

Keywords: socially responsible investment; economic growth; environmental economics; resource dynamics; stock market (search for similar items in EconPapers)
JEL-codes: H23 M14 O16 O41 Q21 (search for similar items in EconPapers)
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: The environmental and macroeconomic effects of socially responsible investment (2011)
Working Paper: The environmental and macroeconomic effects of socially responsible investment (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_2349

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