Green Multistakeholder Theory *
38 Pages Posted: 24 Jan 2024
Date Written: December 31, 2023
Abstract
We present a tractable matching model of firms and green stakeholders, who incur a disutility from their firms' emissions. There are multiple types of stakeholders, such as banks and workers, and each type is required for output. We develop a solution method to characterize the competitive multilateral-matching equilibrium. Productive firms either have all brown or green stakeholders, while less-productive firms have mixed teams. A firm's costly abatement increases with the green stakeholders on its team. There are compensating differentials and rents to skilled brown stakeholders. Due to sorting, green financial institutions generate limited abatement. A counterfactual skills-weighted mandate requiring larger institutions to commit more to green companies maximizes impact.
Keywords: Stakeholders, Boycott, Carbon Emissions, Greenium, Climate Change, Compensating differentials
JEL Classification: G2, G3, H2, H4, Q50
Suggested Citation: Suggested Citation