| By: |
Markus Leippold (University of Zurich; Swiss Finance Institute);
Tingyu Yu (University of Zurich) |
| Abstract: |
This paper investigates if firms’ green innovation efforts are reflected in
their stock market prices. Firms with a higher proportion of green patents
experience lower stock returns than those with a lower percentage. A
long-short portfolio based on green patent shares has an average annual return
of 8%, which remains significant when we control for common risk factors.
However, firms with high green patent shares outperform their counterparts
after events that increase climate concerns and strengthen environmental
regulations. Moreover, firms with green innovation attract more institutional
ownership and can weakly decrease their future carbon intensity and incident
involvement. |
| Keywords: |
Green patents, cross-section of stock returns, event study, institutional investors |
| JEL: |
G12 G14 O34 Q55 |
| Date: |
2023–03 |
| URL: |
http://d.repec.org/n?u=RePEc:chf:rpseri:rp2321&r=ipr |