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Finance and Green Growth.
- Source :
- Economic Journal; Feb2023, Vol. 133 Issue 650, p637-668, 32p, 11 Charts, 2 Graphs
- Publication Year :
- 2023
-
Abstract
- We study how countries' financial structure affects their transition to low-carbon growth. Using global industry-level data, we document that carbon-intensive industries reduce emissions faster in economies with deeper stock markets. The main channel underpinning this stylised fact is that stock markets facilitate green innovation in carbon-intensive sectors, resulting in lower carbon emissions per unit of output. More tentative evidence indicates that stock markets also help to reallocate investment towards more energy-efficient sectors. Cross-border spillovers are limited: less than 5% of these industry-level reductions in domestic emissions are offset by carbon embedded in imports. A firm-level analysis of an exogenous shock to the cost of equity in Belgium confirms our findings. [ABSTRACT FROM AUTHOR]
Details
- Language :
- English
- ISSN :
- 00130133
- Volume :
- 133
- Issue :
- 650
- Database :
- Complementary Index
- Journal :
- Economic Journal
- Publication Type :
- Academic Journal
- Accession number :
- 161902316
- Full Text :
- https://doi.org/10.1093/ej/ueac081