The Effect of Carbon Dissemination on Cost of Equity

Mohammed S. Albarrak; Marwa Elnahass; Aly Salama

doi:10.1002/bse.2310

The Effect of Carbon Dissemination on Cost of Equity

Mohammed S. Albarrak, Marwa Elnahass, Aly Salama

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Abstract

This study examines whether firms can influence their cost of equity (COE) by broadly disseminating their carbon information over Twitter. We study firms' dissemination decisions of carbon information by developing a comprehensive measure of carbon information that a firm makes on Twitter, referred to as iCarbon. Using a sample of 1,737 firm‐year observations for 584 nonfinancial firms with a Twitter account and listed on the U.S. NASDAQ stock exchange over the period 2009–2015, we find that iCarbon is significantly and negatively associated with COE. Our results are consistent after determining the effect of Bloomberg's environmental and environmental, social, and governance disclosure. The findings also hold when using alternative measures of COE and iCarbon.

Original language	English
Pages (from-to)	1179-1198
Journal	Business Strategy and the Environment
Volume	28
Issue number	6
Early online date	27 Mar 2019
DOIs	https://doi.org/10.1002/bse.2310
Publication status	Published - 1 Sep 2019
Externally published	Yes

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bse.2310Final published version, 1.23 MBLicence: CC BY

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title = "The Effect of Carbon Dissemination on Cost of Equity",

abstract = "This study examines whether firms can influence their cost of equity (COE) by broadly disseminating their carbon information over Twitter. We study firms' dissemination decisions of carbon information by developing a comprehensive measure of carbon information that a firm makes on Twitter, referred to as iCarbon. Using a sample of 1,737 firm‐year observations for 584 nonfinancial firms with a Twitter account and listed on the U.S. NASDAQ stock exchange over the period 2009–2015, we find that iCarbon is significantly and negatively associated with COE. Our results are consistent after determining the effect of Bloomberg's environmental and environmental, social, and governance disclosure. The findings also hold when using alternative measures of COE and iCarbon. ",

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AB - This study examines whether firms can influence their cost of equity (COE) by broadly disseminating their carbon information over Twitter. We study firms' dissemination decisions of carbon information by developing a comprehensive measure of carbon information that a firm makes on Twitter, referred to as iCarbon. Using a sample of 1,737 firm‐year observations for 584 nonfinancial firms with a Twitter account and listed on the U.S. NASDAQ stock exchange over the period 2009–2015, we find that iCarbon is significantly and negatively associated with COE. Our results are consistent after determining the effect of Bloomberg's environmental and environmental, social, and governance disclosure. The findings also hold when using alternative measures of COE and iCarbon.

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The Effect of Carbon Dissemination on Cost of Equity

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