Publication Type
Working Paper
Version
publishedVersion
Publication Date
1-2022
Abstract
This paper examines whether and how firms combat climate change. Our study provides robust evidence that firms outsource part of their carbon emissions to foreign suppliers and shows how internal and external stakeholders significantly shape firms' environmental policies. Furthermore, firms tend to seek a foreign supplier and decrease their emission abatement efforts as pressure to reduce domestic emissions intensifies. These firms are also less incentivized to develop green technologies. Finally, we find that outsourcing emissions has real and economic consequences, with investors demanding a higher carbon premium for their exposures to carbon risks associated with increased outsourced emissions.
Keywords
Outsourcing Emissions, Imports, Stakeholders, Reputational Risk, Green Technologies, Carbon Premium
Discipline
Corporate Finance | Environmental Sciences | Finance and Financial Management | Strategic Management Policy
Research Areas
Finance
First Page
1
Last Page
52
Identifier
10.2139/ssrn.3765485
Publisher
European Corporate Governance Institute Working Paper
City or Country
Brussels
Embargo Period
4-25-2022
Citation
DAI, Rui; DUAN, Rui; LIANG, Hao; and NG, Lilian.
Outsourcing climate change. (2022). 1-52.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/7000
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.2139/ssrn.3765485
Included in
Corporate Finance Commons, Environmental Sciences Commons, Finance and Financial Management Commons, Strategic Management Policy Commons