Green and brown returns in a production economy, with Thore Kockerols and Yves Schueler.
Abstract:
Does it pay to invest in green companies? In countries where a market for carbon is functioning, such as those within the European Union, our findings suggest that it should be beneficial. Using a sample of green and brown European firms, we initially demonstrate that green companies have outperformed brown ones in recent times. Subsequently, we develop a production economy model in which brown firms acquire permits to emit carbon into the atmosphere. We find that the presence of a well-functioning carbon market could account for the green equity premium observed in our data. Incorporating a preference for green financial assets is also unlikely to overturn our results.
Green asset pricing, with Ghassane Benmir and Gauthier Vermandel, new version in progress.
2021 EFA best paper prize in responsible finance
The trade-off between public health and the economy in the early stage of the COVID-19 pandemic
Leveraged property cyclesÂ