Real Effects of Climate Policy: Financial Constraints and Spillovers

Bartram, Söhnke M.; Hou, Kewei; Kim, Sehoon

doi:10.2139/ssrn.3262211

Cited by 16 publications

(7 citation statements)

References 49 publications

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“…31 Only 6.5% of all firm-years for which we have matched industry information are classified as pollution-intensive, yet the total emissions of 30 Given this evidence that environmental policies can affect firm value, several recent studies have attempted to identify determinants of firms' polluting behaviors. For example, financial constraints are known to exacerbate firms' incentives to pollute (Bartram, Hou, and Kim, 2019;Levine, Lin, Wang, and Xie, 2018;Kim and Xu, 2020;Shive and Forster, 2020). Our paper adds to this strand of the literature by providing evidence on the importance of operating locations in understanding firms' polluting incentives.…”

Section: Pollution-intensive Industriesmentioning

confidence: 84%

“…Related firm-level studies also provide indirect evidence, without observing actual pollution levels, that firms are more likely to have facilities in countries with weak environmental policies Henderson, 2000, 2001; Ben Kheder and Zugravu, 2012;Dam and Scholtens, 2012). A few recent studies use actual CO2 emissions data, but the scope of these studies is limited -within specific countries or industries (e.g., Ederington, Levinson, and Minier, 2005;Bento, Freedman, and Lang, 2015;Bartram, Hou, and Kim, 2019).…”

Section: Introductionmentioning

confidence: 99%

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Exporting Pollution: Where Do Multinational Firms Emit CO2?

et al. 2021

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Despite widespread awareness of the detrimental impact of CO2 pollution on the world climate, countries vary widely in how they design and enforce environmental laws. Using novel microdata about multinational firms' CO2 emissions across countries, we document that firms headquartered in countries with strict environmental policies perform their polluting activities abroad in countries with relatively weaker policies. These effects are largely driven by tightened environmental policies in home countries that incentivize firms to pollute abroad rather than lenient foreign policies that attract those firms. Although firms headquartered in countries with strict domestic environmental policies are more likely to export pollution to foreign countries, they nevertheless emit somewhat less overall CO2 globally.

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Section: Pollution-intensive Industriesmentioning

confidence: 84%

Section: Introductionmentioning

confidence: 99%

Exporting Pollution: Where Do Multinational Firms Emit CO2?

et al. 2021

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Section: Pollution-intensive Industriesmentioning

confidence: 84%

OECD International Direct Investment Statistics

2017

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Despite widespread awareness of the detrimental impact of CO 2 pollution on the world climate, countries vary widely in how they design and enforce environmental laws. Using novel microdata about multinational firms' CO 2 emissions across countries, we document that firms headquartered in countries with strict environmental policies perform their polluting activities abroad in countries with relatively weaker policies. These effects are largely driven by tightened environmental policies in home countries that incentivize firms to pollute abroad rather than lenient foreign policies that attract those firms. Although firms headquartered in countries with strict domestic environmental policies are more likely to export pollution to foreign countries, they nevertheless emit less overall CO 2 globally.

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“…A comprehensive recent review of the literature on the effects of carbon pricing on carbon emissions is (9). She highlights that surprisingly few papers have conducted an ex-post empirical analysis of how carbon pricing has actually affected CO 2 emissions, 2 and that the vast majority of these papers are focused on Europe. She notes that in most cases, studies have estimated emissions reductions in the sectors covered by the carbon pricing policy, although some extrapolate to broader jurisdictional effects (3,22,26).…”

Section: Literaturementioning

confidence: 99%