Financial market instability and CO2 emissions

Patrick Richard

Cahiers de recherche from Departement d'économique de l'École de gestion à l'Université de Sherbrooke

Abstract: Capital markets may be an important tool in the reduction of pollution emissions. Indeed, they provide firms with an incentive to maintain a good environmental record (or at least, a good reputation) in order to maximize the value of their equity shares. Also, efficient capital markets may facilitate financing of environmentally friendly projects and reduce problems resulting from asymmetric information. In this paper, I use a panel of 36 countries between 1981 and 2007 to study the impact of financial market instability on CO2 emissions at the national level. According to my results, higher financial stability is beneficial for the environment.

Keywords: CO2 emissions; financial stability; dynamic panel data model (search for similar items in EconPapers)
Pages: 22 pages
Date: 2010-06-17
New Economics Papers: this item is included in nep-ene and nep-env
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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http://gredi.recherche.usherbrooke.ca/wpapers/GREDI-1020.pdf First version, 2010 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:shr:wpaper:10-20

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