Environmental Sustainability and Implied Cost of Equity: International Evidence.

BUSINESS & the environment; ECONOMICS; SUSTAINABILITY; WASTE minimization; FINANCIAL performance; CAPITAL costs

In this paper, we examine the relationship between the environmental practices and implied cost of equity. Using a comprehensive sample of 23,301 firm-year observations from 43 countries, we find that an improvement in environmental practices leads to reduction of the implied cost of equity. Further, the results are stronger in countries where country-level governance is weak. Our results indicate that most of the benefits come from the reduction of emission and unnecessary wastage of resources. Our results remain robust to alternative specifications and endogeneity concerns. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Business Ethics is the property of Springer Nature and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)