The concept of using the excess rate of return in the study of the impact of EU ETS on the value of enterprises

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The aim of the study is to assess the impact of the EU ETS on the profitability and the excess rate of return (ERR), which is the difference between profitability and the cost of capital. The study was conducted between 2008 and 2016 on a sample of 91 very large companies covered by the EU ETS. Models for panel data were used for the analysis. No statistically significant relationship between emission allowances and return on equity was found. However, a statistically significant relationship between emission allowances and ERR was detected. This could mean that companies were able to pass on the cost of emission allowances to their counterparties. However, greenhouse gas emissions entail greater exposure to the price risk of emission allowances, which the companies were unable to diversify, resulting in an increase in the cost of equity. Moreover, the study shows that the effect of emission allowances on the value of companies may not be symmetrical, as the variable under study was only statistically significant when it took on positive values (GHG emissions were higher than the allocation). As proven, an analysis of the excess returns can help to explain some of the inconsistencies and contribute to a better understanding of the impact of the EU ETS on the value of companies. The research carried out helps to answer the question of who bears the costs of reducing greenhouse gases and is it true that there are no costs for companies and therefore the introduction of the EU ETS has not affected their value. The conclusions of this study may be of interest to policymakers, investors but also to the public.

Tytuł
The concept of using the excess rate of return in the study of the impact of EU ETS on the value of enterprises
Twórca
Witkowski Paweł ORCID 0000-0003-0080-3893
Słowa kluczowe
value of firm; pollution tax; EU ETS; incidence; corporate regulation
Słowa kluczowe
wartość przedsiębiorstwa; podatki środowiskowe; incydencja podatkowa
Data
2022
Typ zasobu
artykuł
Identyfikator zasobu
DOI 10.7172/2353-6845.jbfe.2022.2.6
Źródło
Journal of Banking and Financial Economics, 2022, vol. 2 no. 18, pp. 72-93
Język
angielski
Prawa autorskie
CC BY CC BY
Dyscyplina naukowa
Ekonomia i finanse; Dziedzina nauk społecznych
Kategorie
Publikacje pracowników US
Data udostępnienia22 lut 2023, 14:12:50
Data mod.22 lut 2023, 14:12:50
DostępPubliczny
Aktywnych wyświetleń0