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Financial market instability and CO2 emissions

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  • Patrick Richard

    ()
    (GREDI, Département d'économique, Université de Sherbrooke)

Abstract

Capital markets may be an important tool in the reduction of pollution emissions. Indeed, they provide firms with an incentive to maintain a good environmental record (or at least, a good reputation) in order to maximize the value of their equity shares. Also, efficient capital markets may facilitate financing of environmentally friendly projects and reduce problems resulting from asymmetric information. In this paper, I use a panel of 36 countries between 1981 and 2007 to study the impact of financial market instability on CO2 emissions at the national level. According to my results, higher financial stability is beneficial for the environment.

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File URL: http://gredi.recherche.usherbrooke.ca/wpapers/GREDI-1020.pdf
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Bibliographic Info

Paper provided by Departement d'Economique de la Faculte d'administration à l'Universite de Sherbrooke in its series Cahiers de recherche with number 10-20.

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Length: 22 pages
Date of creation: 17 Jun 2010
Date of revision:
Handle: RePEc:shr:wpaper:10-20

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Keywords: CO2 emissions; financial stability; dynamic panel data model;

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References

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Cited by:
  1. Shahbaz, Muhammad, 2013. "Does financial instability increase environmental degradation? Fresh evidence from Pakistan," Economic Modelling, Elsevier, vol. 33(C), pages 537-544.
  2. Shahbaz, Muhammad, 2010. "Does financial instability increase environmental pollution in Pakistan?," MPRA Paper 31360, University Library of Munich, Germany, revised 28 Mar 2011.

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