Finance Seminar with Laura Starks, McCombs School of Business, University of Texas at Austin

On Friday, June 16, Laura Starks, McCombs School of Business, University of Texas at Austin, will be giving a seminar on the paper: Climate Regulatory Risks and Corporate Bonds

Friday, June 16, 2023 - 11:00 to 12:15

The Department of Finance is proud to announce the upcoming seminar with Laura Starks, McCombs School of Business, University of Texas at Austin.

Laura Starks will present: Climate Regulatory Risks and Corporate Bonds

Location:
Solbjerg Plads 3
2000 Frederiksberg
Room: SPs07

ABSTRACT: Investor concerns about climate and other environmental regulatory risks suggest that these risks should affect corporate bond risk assessment and pricing. We test this hypothesis and find that firms with poor environmental profiles or high carbon footprints tend to have lower credit ratings and higher yield spreads, particularly when their facilities are located in states with stricter regulatory enforcement. Using the Paris Agreement as a shock to expected climate risk regulations, we provide evidence that climate regulatory risks causally affect bond credit ratings and yield spreads. Accordingly, the composition of institutional ownership also changes after the Agreement.

The page was last edited by: Department of Finance // 01/25/2024