The Effect of Carbon Dissemination on Cost of Equity

This study examines whether firms can influence their cost of equity (COE) by broadly disseminating their carbon information over Twitter. We study firms' dissemination decisions of carbon information by developing a comprehensive measure of carbon information that a firm makes on Twitter, referred to as iCarbon. Using a sample of 1,737 firm-year observations for 584 non-financial firms with a Twitter account and listed on the US NASDAQ stock exchange over the period 2009-2015, we find that iCarbon is significantly and negatively associated with COE. Our results are consistent after determining the effect of Bloomberg's environmental (ENV) and environmental-social-governance (ESG) disclosure. The findings also hold when using alternative measures of COE and iCarbon