Conference Agenda

Overview and details of the sessions of this conference. Please select a date or location to show only sessions at that day or location. Please select a single session for detailed view (with abstracts and downloads if available).

Please note that all times are shown in the time zone of the conference. The current conference time is: 14th May 2024, 07:11:32am EDT

 
 
Session Overview
Session
Track T4-3: Climate Finance: Risk and Regulation
Time:
Tuesday, 21/May/2024:
10:30am - 11:15am

Session Chair: Matthew Gustafson, Pennsylvania State University
Discussant: Stefan Lewellen, Pennsylvania State University
Location: Room 1203


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Presentations

Opening the Brown Box: Production Responses to Environmental Regulation

Rebecca De Simone1, S. Lakshmi Naaraayanan1, Kunal Sachdeva2

1London Business School; 2Jesse H. Jones Graduate School of Business, Rice University

We study production responses to emission capping regulation on manufacturing firms. We find that firms lowered their pollution as they transitioned from self-generated to externally sourced electricity, shifted towards producing less coal-intensive products, and increased their abatement expenditures. Firms preserved profitability by increasing their production towards higher-margin products. However, firms in highly polluting industries produced fewer products, and in the aggregate, leading to lower product variety, higher markups, an altered firm-size distribution, and lower business formation. Our findings highlight both the mechanisms behind how mandated pollution reduction can be effective and its costs, suggesting a loss in agglomeration externalities.


De Simone-Opening the Brown Box-1069.pdf


 
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