IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/20133.html

Sustainable Investing and Public Goods Provision

Author

Listed:
  • Piatti, Ilaria
  • Shapiro, Joel
  • Wang, Xuan

Abstract

We model investors who take into account the amount of public goods firms produce (e.g., carbon emission reductions). In an asset pricing model with production and public goods, we find that more environmentally conscious investors invest more overall, invest more in clean firms, and may invest more in dirty firms. The magnitude and sign of CAPM alphas depends on a comparison between a firm's systematic risk and its relative public good contribution. There is underprovision of the public good. Government provision crowds out private provision, and may reduce overall public good provision. Government provision may be dominated by green subsidies.

Suggested Citation

  • Piatti, Ilaria & Shapiro, Joel & Wang, Xuan, 2025. "Sustainable Investing and Public Goods Provision," CEPR Discussion Papers 20133, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:20133
    as

    Download full text from publisher

    File URL: https://cepr.org/publications/DP20133
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    ;

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:20133. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CEPR (email available below). General contact details of provider: https://cepr.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.