学術雑誌論文

学術雑誌論文

text

Annals of Operations Research. 2023

Corporate sustainability, investment, and capital structure

Nishihara, Michi

Springer

英語

text

2023-12-02

https://doi.org/10.1007/s10479-023-05699-3

The version of record of this article, first published in Annals of Operations Research, is available online at Publisher’s website: https://doi.org/10.1007/s10479-023-05699-3

This study develops a real options model in which a firm invests in either a sustainable project or an unsustainable project. The sustainable project requires a high investment cost and yields cash flows perpetually, whereas the unsustainable project requires a low investment cost and yields cash flows until a random maturity. The random termination of cash flows reflects the project’s environmental, social, and governance (ESG) risk. In the model, the optimal investment choice and timing are analytically derived, and the effects of key parameters on the choice are also examined. Higher ESG risk, growth rate, and volatility, and lower discount rate encourage sustainable investing mainly through their impacts on the net present value and timing option value. The less sustainable firm chooses higher leverage because it cares less about the disadvantages of debt. Therefore, access to debt financing and a higher corporate tax rate (tax shield) discourage sustainable investing.

This article is licensed under a Creative Commons Attribution 4.0 International License.

93377

Corporate sustainability, investment, and capital structure

Nishihara, Michi

Springer

英語

2023-12-02

Annals of Operations Research

https://doi.org/10.1007/s10479-023-05699-3

https://hdl.handle.net/11094/93377