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We investigate the impact of expectations about future climate policy on investment decisions of fossil fuel firms. Our … empirical analysis reveals that firms with greater exposure to climate change significantly increased their investment in … response to the Paris Agreement, in contrast to firms with lower exposure. Importantly, investment was directed towards …
Persistent link: https://www.econbiz.de/10014558848
Risk parity has been considered a heuristic asset allocation method. In this paper, we show that, to the contrary, risk parity is a special case of a mean-risk type of a portfolio optimization problem with log-regularization to constrain weights. We show that log-regularization leads to a fund...
Persistent link: https://www.econbiz.de/10013103702
The 2015 Paris Agreement is a landmark in limiting emissions and targeting global warming well below 2, preferably 1.5, degrees Celsius compared to pre-industrial levels. In this light, we investigate how to efficiently construct equity portfolios that help mitigating climate change risk but at...
Persistent link: https://www.econbiz.de/10013291123
A formula is derived for the social cost of carbon (SCC) that takes account of intragenerational income inequality and its evolution with economic growth. The social discount rate (SDR) should be adjusted to account for intragenerational and intergenerational inequality aversion and for risk...
Persistent link: https://www.econbiz.de/10014082790
This paper analyses the impact of exchange rate uncertainty upon the pattern of investment in different exchange rate … exchange rate regimes indicates that currency volatility exerts only a small influence upon the level of investment spending …
Persistent link: https://www.econbiz.de/10011400788
-level liquidity as a necessary catalyst in linking investment plan revisions and uncertainty – without sufficient cash reserves, the …We find that shocks to aggregate geopolitical uncertainty are associated with an average decline in firm-level capital … investment. The decline in investments increases in the degree of external financial constraints faced by firms, with the effect …
Persistent link: https://www.econbiz.de/10012851744
economic conditions. Owing to this, the current research tends to disclose the impact of economic policy uncertainty (EPU) on …A stable economic condition is crucial for an organization's success. Any fluctuation in economic policy directly … corporate investment decisions and how this impact varies across countries having better governance quality. To achieve the …
Persistent link: https://www.econbiz.de/10014500430
-related investment cost is uncertain. Holding the average one-period investment cost constant, policy uncertainty leads to a higher … capital price and subsequently to lower levels of long-run aggregate investment and output. Policy uncertainty also makes … the simulated investment sequences from the model mimic the actual investment sequences. I find that policy uncertainty …
Persistent link: https://www.econbiz.de/10014198834
highlights future investment and financing challenges, especially for road transport. The methodology piloted in this study can …
Persistent link: https://www.econbiz.de/10012422659
We investigate the cost of capital in a model with an agency conflict between inside managers and outside shareholders. Inside ownership reflects the classic tradeoff between incentives and risk diversification, and the severity of agency costs depends on a parameter representing investor...
Persistent link: https://www.econbiz.de/10011623466