Environmental liability and the capital structure of firms |
| |
Authors: | Alistair Ulph Laura Valentini |
| |
Affiliation: | a Department of Economics, University of Southampton, Southampton SO17 1BJ, UK;b University of Southampton and Tilburg University, UK |
| |
Abstract: | This paper analyses the impact of environmental liability regimes on the capital structure of firms. We show that imposing environmental liability only on polluting firms, with limited liability, increases use of bank debt. Extending environmental liability to banks lowers bank borrowing relative to liability only on firms, with an ambiguous effect relative to no liability. Using US industry-level data we estimate a reduced-form model of bank borrowing by firms and show that the introduction of environmental liability only on firms increased bank borrowing by 15–20%, but when liability was extended to banks, borrowing returned to a level slightly higher than with no liability. |
| |
Keywords: | Environmental liability Capital structure Limited liability CERCLA |
本文献已被 ScienceDirect 等数据库收录! |
|