IDEAS home Printed from https://ideas.repec.org/p/hal/journl/hal-05839673.html

Do changes in environmental legislation harm firms’ financial performance? Evidence from Europe

Author

Listed:
  • Nicolae Stef

    (BSB - Burgundy School of Business (BSB) - ESC Dijon-Bourgogne, CEREN - Centre de Recherche sur les Entreprises - BSB - Burgundy School of Business (BSB) - ESC Dijon-Bourgogne)

  • Jean-Loup Soula

Abstract

Global warming affects all countries and requires policy responses from legislators and public actors. As governments seek to achieve less carbon-intensive economies, environmental legislation is subject to changes. Therefore, our study investigates firms' capacity to adapt to new climate-related regulations and policies. Using a sample of 3643 listed non-financial firms from 31 European countries over the period 2012–2023, we find that changes in environmental legislation harm the financial performance of firms with a high degree of environmental transparency. If firms aim for an optimal level of environmental disclosure that can boost their performance, more climate change regulations may alter their choice effectiveness, leading to a lower degree of performance. Our study shows that research and development (R&D) can improve firms' financial performance in countries subject to changes in the environmental legislation. Thus, firms should invest in R&D as a prevention mechanism against the negative impact of future legislation changes.

Suggested Citation

  • Nicolae Stef & Jean-Loup Soula, 2025. "Do changes in environmental legislation harm firms’ financial performance? Evidence from Europe," Post-Print hal-05839673, HAL.
    • Handle: RePEc:hal:journl:hal-05839673
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a
    for a similarly titled item that would be available.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    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:hal:journl:hal-05839673. 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: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    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.