{"title":"Corporate political risk and environmental performance","authors":"Md Safiullah , Md. Nurul Kabir","doi":"10.1016/j.gfj.2024.100939","DOIUrl":null,"url":null,"abstract":"<div><p>We investigate the association between firm-level political risk and environmental performance in U.S. firms during the period 2004–2018. We find a negative impact of political risk on overall environmental performance and its three components (a) carbon emissions reduction; (b) production innovation; and (c) resource reduction. Our findings remain robust when we employ firm fixed-effects, propensity score-matching estimates and the instrumental variable approach to address potential endogeneity concerns. The channel analysis shows that firms with high political risk face higher cash flow volatility and higher default risk, which lead to lower environmental performance.</p></div>","PeriodicalId":46907,"journal":{"name":"Global Finance Journal","volume":"60 ","pages":"Article 100939"},"PeriodicalIF":5.5000,"publicationDate":"2024-02-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.sciencedirect.com/science/article/pii/S1044028324000115/pdfft?md5=955fd7f9f183d176f10e59d4a7c08faf&pid=1-s2.0-S1044028324000115-main.pdf","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Global Finance Journal","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S1044028324000115","RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
We investigate the association between firm-level political risk and environmental performance in U.S. firms during the period 2004–2018. We find a negative impact of political risk on overall environmental performance and its three components (a) carbon emissions reduction; (b) production innovation; and (c) resource reduction. Our findings remain robust when we employ firm fixed-effects, propensity score-matching estimates and the instrumental variable approach to address potential endogeneity concerns. The channel analysis shows that firms with high political risk face higher cash flow volatility and higher default risk, which lead to lower environmental performance.
期刊介绍：
Global Finance Journal provides a forum for the exchange of ideas and techniques among academicians and practitioners and, thereby, advances applied research in global financial management. Global Finance Journal publishes original, creative, scholarly research that integrates theory and practice and addresses a readership in both business and academia. Articles reflecting pragmatic research are sought in areas such as financial management, investment, banking and financial services, accounting, and taxation. Global Finance Journal welcomes contributions from scholars in both the business and academic community and encourages collaborative research from this broad base worldwide.
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