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Does green technology innovation matter to the cost of equity capital?

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  • Elmawazini, Khaled
  • Chkir, Imed
  • Mrad, Fatma
  • Rjiba, Hatem

Abstract

Using a panel of U.S. public firms, we present the first evidence highlighting the relation between green technology innovation and cost of equity capital. Consistent with our prediction, we find that greater green technology innovation is associated with lower cost of equity capital. Our results are statistically significant and economically important. Our findings are robust to a battery of sensitivity checks, including use of multiple estimation methods, alternative proxies of green innovation, various measures of cost of equity capital, and potential truncation problem.

Suggested Citation

  • Elmawazini, Khaled & Chkir, Imed & Mrad, Fatma & Rjiba, Hatem, 2022. "Does green technology innovation matter to the cost of equity capital?," Research in International Business and Finance, Elsevier, vol. 62(C).
    • Handle: RePEc:eee:riibaf:v:62:y:2022:i:c:s0275531922001234
    DOI: 10.1016/j.ribaf.2022.101735
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    1. Cheng, Louis T.W. & Shen, Jianfu & Wojewodzki, Michal, 2023. "A cross-country analysis of corporate carbon performance: An international investment perspective," Research in International Business and Finance, Elsevier, vol. 64(C).

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    More about this item

    Keywords

    Green technology innovation; Cost of equity capital; Patents Citations;
    All these keywords.

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • G1 - Financial Economics - - General Financial Markets
    • G3 - Financial Economics - - Corporate Finance and Governance

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