The Limits of Limited Liability: Evidence from Industrial Pollution

Akey, Pat; Appel, Ian

doi:10.2139/ssrn.3083013

Cited by 6 publications

(2 citation statements)

References 5 publications

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“…Baldauf, Garlappi, and Yannelis (2019) and Bernstein, Gustafson, and Lewis (2019) show that expected sea level rises affect real asset values in coastal areas, although Murfin and Spiegel (2019) reach the opposite conclusion in their analysis. Akey and Appel (2018) and Bartram, Hou and Kim (2019) show that pollution has real effects on firm decisions.…”

Section: Importance Of Climate Risksmentioning

confidence: 99%

The Importance of Climate Risks for Institutional Investors

Krueger

Sautner

Starks

2020

The Review of Financial Studies

1,354

312

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According to our survey about climate risk perceptions, institutional investors believe climate risks have financial implications for their portfolio firms and that these risks, particularly regulatory risks, already have begun to materialize. Many of the investors, especially the long-term, larger, and ESG-oriented ones, consider risk management and engagement, rather than divestment, to be the better approach for addressing climate risks. Although surveyed investors believe that some equity valuations do not fully reflect climate risks, their perceived overvaluations are not large.

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Section: Importance Of Climate Risksmentioning

confidence: 99%

The Importance of Climate Risks for Institutional Investors

Krueger

Sautner

Starks

2020

The Review of Financial Studies

1,354

312

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“…public) is an important determinant for firm pollution. Focusing on the legal environment, Akey and Appel (2017) find that an increase in liability protection for parent companies leads to an increase in toxic emissions by subsidiaries. I contribute to this literature by showing that, in addition to these factors, the cost of financing has a first order effect on firm emissions as financing conditions affect a firm's ability to implement (capital-intensive) emission reduction activities.…”

Section: Introductionmentioning

confidence: 99%

Financing Conditions and Toxic Emissions

Goetz

2019

SSRN Journal

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Exploiting heterogeneity in U.S. firms' exposure to an unconventional monetary policy shock that reduced debt financing costs, I identify the impact of financing conditions on firms' toxic emissions. I find robust evidence that lower financing costs reduce toxic emissions and boost investments in emission reduction activities, especially capital-intensive pollution control activities. The effect is stronger for firms in noncompliance with environmental regulation. Examining the ability of regaining regulatory compliance by implementing pollution control activities I find that only capital-intensive activities help firms regaining compliance. These findings underscore the impact of firms' financing conditions for emissions and the environment.

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