Cash-rich Firms and Carbon Emissions
Journal article
Authors | Alam, M., Safiullah, M. and Islam, M. |
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Abstract | We investigate whether corporate cash holdings affect carbon dioxide emissions. Using a sample of 5,402 firm-years observations from 943 U.S. firms during 2007–2017, we find that carbon emissions are lower in firms with higher corporate cash holdings. The effect of cash holdings on carbon emissions is more pronounced in firms with low leverage and less financial constraints. Our channel analysis further unveils that renewable energy consumption and carbon abatement investment are higher in cash-rich firms, which transmit lower carbon emissions. Our findings are robust to different identification strategies and alternative measures of cash holdings and carbon emissions. Overall, our paper provides novel evidence on the role of corporate cash holdings in mitigating carbon emissions. |
Keywords | Cash holdings; Carbon emissions; Renewable energy consumption; Carbon abatement investment |
Year | 2022 |
Journal | International Review of Financial Analysis |
Journal citation | 81, pp. 1-14 |
Publisher | Elsevier |
ISSN | 1873-8079 |
Digital Object Identifier (DOI) | https://doi.org/10.1016/j.irfa.2022.102106 |
Web address (URL) | https://www.sciencedirect.com/science/article/pii/S105752192200076X |
Accepted author manuscript | License File Access Level Open |
Publisher's version | License File Access Level Open |
Output status | Published |
Publication dates | |
Online | 09 Mar 2022 |
Publication process dates | |
Accepted | 04 Mar 2022 |
Deposited | 11 Dec 2023 |
https://repository.derby.ac.uk/item/q1955/cash-rich-firms-and-carbon-emissions
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Accepted author manuscript
RR_IRFA_Manuscript-14501-22-Alam.docx | ||
License: CC BY 4.0 | ||
File access level: Open |
Publisher's version
cash holding.pdf | ||
License: CC BY 4.0 | ||
File access level: Open |
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