【Empirical Seminar】Pollution Abatement Investment under Financial Frictions and Policy Uncertainty

  • 研討會日期 : 2022-12-20
  • 時間 : 10:30
  • 主講人 : Professor Chi-Yang Tsou (鄒季洋)
  • 地點 : Conference room B110
  • 主持人 : Professor Tzu-Ting Yang
  • 演講者簡介 : Professor Chi-Yang Tsou received his Ph.D. in the University of Hong Kong in 2018. He is currently a Lecturer (Assistant Professor) at University of Manchester. His research interests are Empirical and Theoretical Asset Pricing, Macro-finance and Firm Dynamics.
  • 演講摘要 : This paper examines how firms' investments in pollution abatement are influenced by financial frictions and policy uncertainty. Our data analyses suggest that financially constrained firms are less likely to invest in pollution abatement and are more likely to release toxic pollutants. Such a pattern is intensified by policy uncertainty measured by close gubernatorial elections. We then develop a heterogeneous firm model in which financially constrained firms to face increased shadow costs of finance from pollution abatement. This relation is further amplified by policy uncertainty for environmental regulation, which further reduces firms' incentives with respect to pollution prevention. Our empirical evidence and model suggest that the effectiveness of environmental policies is subject to corporate financial frictions and policy uncertainty.