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Does the market's reaction to greenhouse gas emissions differ between B2B and B2C? Evidence from South Korea

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  • Kim, Sang Joon
  • Atukeren, Erdal
  • Kim, Hohyun

Abstract

This paper analyzes the relationship between greenhouse gas (GHG) emissions and the financial performance of business-to-business (B2B) or business-to-consumer (B2C) organizations. We find that Tobin's q is positively associated with higher GHG emissions for B2B firms, implying that GHG emissions reduction is regarded as a necessary cost. Meanwhile, a negative relationship is found for B2C firms, which may be due to consumers responding to climate change issues. These findings contribute to our understanding of the heterogeneous relationship in the existing literature. The evidence also implies on the policy level that more stringent regulatory pressure may be required for B2B firms to reduce their GHG emissions.

Suggested Citation

  • Kim, Sang Joon & Atukeren, Erdal & Kim, Hohyun, 2023. "Does the market's reaction to greenhouse gas emissions differ between B2B and B2C? Evidence from South Korea," Finance Research Letters, Elsevier, vol. 53(C).
    • Handle: RePEc:eee:finlet:v:53:y:2023:i:c:s1544612323000144
    DOI: 10.1016/j.frl.2023.103640
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    More about this item

    Keywords

    Carbon emissions; Environmental performance; Financial performance; Tobin's q; B2B; B2C;
    All these keywords.

    JEL classification:

    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • P40 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - General

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