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The Green Tobin's q: theory and evidence

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  • Faria, João Ricardo
  • Tindall, Greg
  • Terjesen, Siri

Abstract

We derive from a dynamic stochastic model a “Green Tobin's q” as a function of a firm's green efforts (technology and pressure), as well as traditional capital stocks and investments. The evidence focuses on the oil industry which is inextricably bound to the debate on climate change. Our regression results indicate a negative impact on Tobin's q from green technologies, and a positive impact on Tobin's q from green stockholder pressure. In addition to adding a theoretical model, we provide empirical evidence regarding pressing issues in the energy transition.

Suggested Citation

  • Faria, João Ricardo & Tindall, Greg & Terjesen, Siri, 2022. "The Green Tobin's q: theory and evidence," Energy Economics, Elsevier, vol. 110(C).
    • Handle: RePEc:eee:eneeco:v:110:y:2022:i:c:s014098832200202x
    DOI: 10.1016/j.eneco.2022.106033
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    Cited by:

    1. Jinhuan Tian & Yan Dong & Gianluca Vagnani & Peizhong Liu, 2023. "Green innovation and the stock market value of heavily polluting firms: The role of environmental compliance costs and technological collaboration," Business Strategy and the Environment, Wiley Blackwell, vol. 32(7), pages 4938-4953, November.

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    More about this item

    Keywords

    Tobin's q; Green patents; Firm investments; Climate change; Shareholder proposals;
    All these keywords.

    JEL classification:

    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
    • L29 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Other
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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