IDEAS home Printed from https://ideas.repec.org/a/eee/riibaf/v70y2024ipas0275531924001004.html
   My bibliography  Save this article

Environmental regulations, agency costs, and firm performance

Author

Listed:
  • Baxamusa, Mufaddal
  • Jalal, Abu

Abstract

We investigate whether environmental regulation reduce agency costs. We find that increases in environmental restrictions decrease liquidity and increase financial constraints. In addition, it increases the likelihood of the firms being acquired or delisted from the exchanges. Such adverse outcomes should lead the shareholders into taking actions that mitigate these risks. We notice that shareholders restructure the board of directors and incentivize CEOs with more stock ownership. These actions, in turn, reduce agency costs and lead to increases in future profitability for these firms.

Suggested Citation

  • Baxamusa, Mufaddal & Jalal, Abu, 2024. "Environmental regulations, agency costs, and firm performance," Research in International Business and Finance, Elsevier, vol. 70(PA).
    • Handle: RePEc:eee:riibaf:v:70:y:2024:i:pa:s0275531924001004
    DOI: 10.1016/j.ribaf.2024.102307
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0275531924001004
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ribaf.2024.102307?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Pollution; Ozone; Porter Hypothesis; Cash; Governance; Profit; Agency;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:riibaf:v:70:y:2024:i:pa:s0275531924001004. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ribaf .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.