Dealing with Carbon Risk and the Cost of Debt: Evidence from the European Market

International Journal of Financial Studies, 2020, 8, 61; doi:10.3390/ijfs8040061

Posted: 10 Dec 2020

See all articles by Fabio Pizzutilo

Fabio Pizzutilo

Università degli Studi di Bari “Aldo Moro”

Massimo Mariani

LUM University - Department of Management

Alessandra Caragnano

LUM Jean Monnet university

Marianna Zito

LUM Jean Monnet university

Date Written: October 15, 2020

Abstract

The ever-increasing attention towards climate change has led to investigate the economic and financial impact of environmental risk. In this scenario, we aimed at investigating the relationship between a specific component of environmental risk, namely the so-called carbon risk, and the cost of debt. This research is motivated by the fact that few studies have focused on the aforementioned relationship. We fill this gap by using a sample of companies listed on the Eurostoxx 600 Index. Our results evidence a positive relationship between carbon risk and cost of debt, providing a relevant contribution to the scarce existing literature on this topic.

Keywords: Environmental Finance, Carbon Risk, Cost of Debt, European Financial Market

JEL Classification: G32, M14

Suggested Citation

Pizzutilo, Fabio and Mariani, Massimo and Caragnano, Alessandra and Zito, Marianna, Dealing with Carbon Risk and the Cost of Debt: Evidence from the European Market (October 15, 2020). International Journal of Financial Studies, 2020, 8, 61; doi:10.3390/ijfs8040061, Available at SSRN: https://ssrn.com/abstract=3712475

Fabio Pizzutilo (Contact Author)

Università degli Studi di Bari “Aldo Moro” ( email )

largo Abbazia S. Scolastica, 53
Bari, 70124
Italy

Massimo Mariani

LUM University - Department of Management ( email )

S.S. 100 km 18
Casamassima, 70010
Italy

Alessandra Caragnano

LUM Jean Monnet university

Casamassima, BA 70010
Italy

Marianna Zito

LUM Jean Monnet university

Casamassima, BA 70010
Italy

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