Firm-Level Financial Resources and Environmental Spills

Jonathan Cohn and Tatyana Deryugina

No 24516, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Using novel US environmental spill data, we document a robust negative relationship between the number of spills a firm experiences in a given year and its contemporaneous and lagged (but not future) cash flow. In addition, studying two natural experiments, we find an increase (decrease) in spills following negative (positive) shocks to a firm's financial resources, both in absolute terms and relative to control firms. Overall, our results suggest that firms' financial resources play an important role in their ability to mitigate environmental risk.

JEL-codes: G32 Q52 Q53 (search for similar items in EconPapers)
Date: 2018-04
New Economics Papers: this item is included in nep-bec, nep-cfn and nep-env
Note: CF EEE PE
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Citations: View citations in EconPapers (10)

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