Green innovation and corporate default risk

IF 5.4 2区经济学 Q1 BUSINESS, FINANCE

Journal of International Financial Markets Institutions & Money Pub Date : 2024-08-05 DOI:10.1016/j.intfin.2024.102041

Md Safiullah , Dinh Hoang Bach Phan , Md. Nurul Kabir

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Abstract

We investigate the impact of green innovation on default risk for the period 2003–2020. Using 15,015 firm-year observations from 2301 unique U.S. firms and a firm-fixed effects regression model, we find that firms with higher green-innovation experience lower default risk as measured by the distance-to-default, probability of default, and CDS spreads. We find robust evidence addressing potential endogeneity in the association between green innovation and default risk by applying three different approaches: the propensity score matching approach, the instrumental variable approach, and the difference-in-differences technique. Our channel analysis results show that high green innovation reduces cashflow volatility and managerial risk-taking, which translates into lower default risk. The influence of green innovation on default risks is contingent on various firm characteristics. It is more pronounced in firms with greater institutional ownership, a younger age, and more carbon-intensive operations.

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绿色创新与企业违约风险

我们研究了 2003-2020 年间绿色创新对违约风险的影响。利用来自 2301 家独特的美国公司的 15015 个公司年观测数据和公司固定效应回归模型，我们发现绿色创新程度较高的公司的违约风险较低，这可以用违约距离、违约概率和 CDS 利差来衡量。我们通过三种不同的方法：倾向得分匹配法、工具变量法和差分技术，找到了解决绿色创新与违约风险之间潜在内生性关联的有力证据。我们的渠道分析结果表明，高绿色创新降低了现金流波动性和管理风险承担，从而降低了违约风险。绿色创新对违约风险的影响取决于企业的各种特征。绿色创新对违约风险的影响在机构持股比例较高、成立时间较短、碳密集型业务较多的企业中更为明显。

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来源期刊

Journal of International Financial Markets Institutions & Money Multiple-

CiteScore

6.60

自引率

10.00%

发文量

142

期刊介绍： International trade, financing and investments, and the related cash and credit transactions, have grown at an extremely rapid pace in recent years. The international monetary system has continued to evolve to accommodate the need for foreign-currency denominated transactions and in the process has provided opportunities for its ongoing observation and study. The purpose of the Journal of International Financial Markets, Institutions & Money is to publish rigorous, original articles dealing with the international aspects of financial markets, institutions and money. Theoretical/conceptual and empirical papers providing meaningful insights into the subject areas will be considered. The following topic areas, although not exhaustive, are representative of the coverage in this Journal. • International financial markets • International securities markets • Foreign exchange markets • Eurocurrency markets • International syndications • Term structures of Eurocurrency rates • Determination of exchange rates • Information, speculation and parity • Forward rates and swaps • International payment mechanisms • International commercial banking; • International investment banking • Central bank intervention • International monetary systems • Balance of payments.