Publication Type

Journal Article

Version

publishedVersion

Publication Date

12-2020

Abstract

This article explores whether increasing fossil fuel divestment commitments are related to the reduction of capital flows into the oil and gas sector, based on an analysis of syndicated lending, equity and bond underwriting across 33 countries from 2000 to 2015. We find that increasing oil and gas divestment pledges in a country are associated with lower capital flows to domestic oil and gas companies. This effect is enhanced in more stringent environmental policy regimes and diminished in countries which heavily subsidise fossil fuels. However, the divestment movement may have an unintended effect, insofar as domestic banks situated in countries with high divestment commitments and stringent environmental policies provide more finance to oil and gas companies abroad. We explain these findings through the lens of institutional theory and show how both regulatory and socially normative elements of institutions shape this dynamic.

Keywords

Fossil fuel divestment, oil and gas finance, environmental policies, environmental finance

Discipline

Environmental Sciences | Finance and Financial Management

Research Areas

Integrative Research Areas

Publication

Journal of Economic Geography

Volume

21

Issue

1

First Page

141

Last Page

164

ISSN

1468-2702

Identifier

10.1093/jeg/lbaa027

Publisher

Oxford University Press

Additional URL

https://doi.org/10.1093/jeg/lbaa027

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