Is investment capital cheaper for green firms? Evidence from equity listings at Euronext - Oslo

Erika Berle (erika.berle@gmail.com), Kjell Jørgensen (kjell.jorgensen@bi.no) and Bernt Ødegaard
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Erika Berle: UiS, Postal: University of Stavanger
Kjell Jørgensen: BI, Postal: BI Business School, , Oslo, Norway

No 2024/1, UiS Working Papers in Economics and Finance from University of Stavanger

Abstract: We investigate whether the sustainability profile of a firm affects the terms at which the firm list on a stock market. Given the evidence that sustainable firms have a lower cost of capital, we expect this to also be reflected in the issue terms at an IPO. The laboratory for our investigation is stock listings (IPOs) at Euronext Oslo. We find that firms which emphasize environmental issues (ESG) in their prospectus have lower implied cost of capital. We find no link between the degree of underpricing and ESG issues. We also provide evidence on recent changes in the IPO landscape, where pure listings are becoming more common, and stock exchanges introduce tiered markets that attract younger and smaller companies.

Keywords: IPO; Cost of Capital; Underpricing; ESG; Euronext Oslo (search for similar items in EconPapers)
JEL-codes: G12 G24 G30 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2024-10-12
New Economics Papers: this item is included in nep-cfn, nep-ene, nep-env and nep-fmk
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:stavef:2024_001

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