Corporate commitment to climate change action,carbon risk exposure,and a firm's debt financing policy

Motivated by the rising consensus that corporate engagement in climate change actions holds the key for society's transition into environmentally resilient economy, the study examines whether a firm's commitment to climate change action and its carbon risk exposure shape the firm's debt financing policy. Based on insights drawn from signaling, corporate reputation, and agency theories, we develop models that link corporate commitment to climate change actions and a firm's carbon risk exposure with its debt financing decisions. Using data drawn from S&P 500 companies, for years 2015 to 2019, we find a robust evidence that firms that engage in higher levels of commitment to climate change actions issue a higher proportion of debt with longer terms to maturity, even after controlling for their carbon risk exposure. However, we do not find a robust evidence corroborating an association between firms' carbon risk exposure and their debt financing policy. These findings are consistent with arguments that high-commitment firms enjoy positive reputation, better credit rating, and reduced agency and information asymmetry costs, allowing them to gain easier access to long-term debt markets.     

Resource saving and productivity enhancing impacts of crop management innovation packages in Ethiopia

Crop management innovations are often not discrete fixed stand‐alone options—and their adoption may imply various combinations and adaptations. This potentially confounds their impact assessment. This article assesses the resource saving and productivity enhancing impacts of a crop management package revolving around minimum tillage in maize‐based farming systems in northwest Ethiopia. An endogenous switching regression model was applied to plot‐ and household‐level survey data collected from 290 rural households operating 590 maize plots during the 2012 production year. Controlling for variations in plot and household characteristics, the average effect of minimum tillage package (minimum tillage package) on maize productivity is 0.44 t/ha. Compared to conventional practice (CP), adoption of the MTP decreased the average male and female labor use in maize production by 14.4 and 8.2 person‐days per ha, respectively. Similarly, MTP adoption decreased draft power use for land preparation by 13.2 pair of oxen‐days per ha. Compared to CP, in general, there is a considerable short‐run maize productivity gain and reduction in labor and draft power use under MTP.     

Corporate carbon risk exposure,voluntary disclosure,and financial reporting quality

The study examines whether corporate carbon risk exposure is associated with financial reporting quality and whether voluntary carbon disclosure mediates the relationship. We analyze data drawn from firms traded on the Johannesburg Stock Exchange (JSE), for the period 2011 to 2015. We document robust evidence that firms with higher carbon risk exposure tend to provide financial statements of poorer quality (i.e., direct effect) and this association is partially mediated through voluntary carbon disclosure (i.e., indirect effect). The overall negative association between corporate carbon risk exposure and the firm's financial reporting quality is partly explained by the quality of voluntary carbon disclosure.     

Demand Systems from Cross-Section Data: An Application to Indonesia

Expanding on earlier demand studies on Indonesia, this study attempts to produce a complete set of food demand parameters on an experimental basis. Two demand systems – the almost ideal demand system and multinomial linear logit model – are estimated using a single cross-section survey. The estimates are used to highlight urban food demand structure, to show their utility for policy analysis, and to evaluate the empirical performance of the two demand systems. In addition, the estimates are positioned relative to other studies in selected Asian countries. Faisant suite à de précédentes études sur la demande appliquées à ľIndonésie, cette étude tente de produire sur une base expérimentale un ensemble complet de paramètres liés à la demande alimentaire. Deux systèmes de demande sont estimés en utilisant les données ďune enquête croisée simple. Ce sont le “almost ideal demand system” et le modèle “logit” linéaire multinomial. Les estimations sont utilisées pour essayer de comprendre la structure de la demande alimentaire urbaine et pour évaluer la performance des deux systèmes de demande. Ľimportance des ces estimations quant à ľanalyse de politique est aussi indiquée. Ďautre part, ces estimations sont comparées à celles ďautres études faites dans certains pays asiatiques.     

Can smallholder farmers adapt to climate variability,and how effective are policy interventions? Agent‐based simulation results for Ethiopia

Climate variability with unexpected droughts and floods causes serious production losses and worsens food security, especially in Sub‐Saharan Africa. This study applies stochastic bioeconomic modeling to analyze smallholder adaptation to climate and price variability in Ethiopia. It uses the agent‐based simulation package Mathematical Programming‐based Multi‐Agent Systems (MPMAS) to capture nonseparable production and consumption decisions at household level, considering livestock and eucalyptus sales for consumption smoothing, as well as farmer responses to policy interventions. We find the promotion of new maize and wheat varieties to be an effective adaptation option, on average, especially when accompanied by policy interventions such as credit and fertilizer subsidy. We also find that the effectiveness of available adaptation options is quite different across the heterogeneous smallholder population in Ethiopia. This implies that policy assessments based on average farm households may mislead policy makers to adhere to interventions that are beneficial on average albeit ineffective in addressing the particular needs of poor and food insecure farmers.     

Frugal Innovation Hijacked: The Co-optive Power of Co-creation

Journal of Business Ethics - In this paper we investigate how different discourses on frugal innovation are articulated, and how the dynamics between these different discourses have led to a...     

Corporate carbon risk,voluntary disclosure,and cost of capital: South African evidence

The study examines the interplay among corporate carbon risk, voluntary disclosure, and cost of capital within the context of South Africa, a “rising power” in the climate policy debate. We develop a system of simultaneous equations models and analyze data drawn from firms traded on the Johannesburg Securities Exchange (JSE), for the period 2010 to 2015, using the three‐stage least squares procedure. We find that voluntary carbon disclosure is associated with lower overall (and equity) cost of capital, after controlling for corporate carbon risk. We also find that firms with higher carbon risk tend to provide better quality carbon disclosure and signal the possibility of high carbon risk to avoid negative market reactions resulting from concealing carbon information. Although the capital market does not appear to incorporate individual firm's carbon risk exposure into the required cost of capital, we find that it generally requires higher returns for companies operating in carbon‐intensive sectors. These findings suggest that firms could exploit the virtues of voluntary carbon disclosure to reduce their overall (and equity) cost of capital. Our findings also imply that regulators and policymakers could point to the cost of capital reducing role of voluntary disclosure to lure firms into voluntarily providing superior quality carbon disclosures.     

Adoption of improved maize varieties in Southern Ethiopia: Factors and strategy options

This paper identifies factors that influence the decision behavior of farmers in Southern Ethiopia in adopting improved maize varieties by estimating a logistic regression. Data for this study came from 222 farmers interviewed as part of a national adoption survey conducted in three selected maize growing administrative zones of Southern Ethiopia in 1998. The paper also assesses the impact of pure and mixed strategy options on the probability of adoption of improved maize varieties through simulation under different scenarios. As far as pure strategies are concerned, the credit strategy is more powerful than the others in terms of raising the probability of adoption. However, results from the analysis of pure versus mixed strategies imply that mixed strategies are no necessarily much better than pure strategies.