Does the Fossil Fuel Divestment Movement Impact New Oil & Gas Fundraising?

Forthcoming in Journal of Economic Geography

33 Pages Posted: 7 May 2019 Last revised: 19 Oct 2020

See all articles by Theodor Cojoianu

Theodor Cojoianu

Queen's University Belfast; University College Dublin (UCD) - Michael Smurfit Graduate School of Business; University of Oxford - Smith School of Enterprise and the Environment

Francisco Ascui

University of Edinburgh Business School

Gordon L. Clark

Oxford University - Smith School of Enterprise and the Environment

Andreas G. F. Hoepner

Smurfit Graduate Business School, University College Dublin; European Commission's Platform on Sustainable Finance; Stockholm School of Economics - Mistra Financial Systems (MFS)

Dariusz Wojcik

University of Oxford, St. Peter's College

Date Written: April 22, 2019

Abstract

This paper explores whether increasing fossil fuel divestment commitments are related to the
reduction of capital flows into the oil & gas sector, based on an analysis of syndicated lending, equity and bond underwriting across 33 countries from 2000 to 2015. We find that increasing oil & gas divestment pledges in a country are negatively related with new capital flows to domestic oil & gas companies. This effect is enhanced in more stringent environmental policy regimes and diminished in countries which heavily subsidise fossil fuels. However, the divestment movement may have an unintended effect, insofar as domestic banks situated in countries with high divestment commitments and stringent environmental policies provide more finance to oil & gas companies abroad. We explain these findings through the lens of institutional theory, and show how both regulatory and socially normative elements of institutions shape this dynamic.

Keywords: fossil fuel divestment, oil and gas finance, environmental policies, environmental finance

JEL Classification: G20, G30, Q28, Q32, Q38, Q50

Suggested Citation

Cojoianu, Theodor and Ascui, Francisco and Clark, Gordon L. and Hoepner, Andreas G. F. and Wojcik, Dariusz, Does the Fossil Fuel Divestment Movement Impact New Oil & Gas Fundraising? (April 22, 2019). Forthcoming in Journal of Economic Geography, Available at SSRN: https://ssrn.com/abstract=3376183 or http://dx.doi.org/10.2139/ssrn.3376183

Theodor Cojoianu (Contact Author)

Queen's University Belfast ( email )

Riddel Hall
185 Stranmillis Road
Belfast, BT9 5EE
United Kingdom

University College Dublin (UCD) - Michael Smurfit Graduate School of Business ( email )

Blackrock, Co. Dublin
Ireland

University of Oxford - Smith School of Enterprise and the Environment ( email )

United Kingdom

Francisco Ascui

University of Edinburgh Business School ( email )

29 Buccleuch Place
Edinburgh, Scotland EH8 9JS
United Kingdom

Gordon L. Clark

Oxford University - Smith School of Enterprise and the Environment ( email )

South Parks Road
Oxford, OX1 3QY
United Kingdom
+44 1865 285197 (Phone)
+44 1865 285073 (Fax)

HOME PAGE: http://www.geog.ox.ac.uk/staff/glclark.html

Andreas G. F. Hoepner

Smurfit Graduate Business School, University College Dublin ( email )

Blackrock, Co. Dublin
Ireland

European Commission's Platform on Sustainable Finance ( email )

2 Rue de Spa
Brussels, 1000
Belgium

Stockholm School of Economics - Mistra Financial Systems (MFS) ( email )

MISUM
Box 6501, SE-113 83 Stockholm
Sweden

Dariusz Wojcik

University of Oxford, St. Peter's College ( email )

New Inn Hall Street
Oxford, OX1 2DL
United Kingdom

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