Playing with your Future: Who Gambles in Defined-Contribution Pension Plans?

In this article, we investigate the relationship between volatility in the stock market and the trading behaviour of employees in defined-contribution (DC) pension schemes. We found that 10 per cent of our sample exhibited compulsive gambling behaviour; in other words, they both ‘fed’ and ‘fed-off’ volatility, and that their individual attributes such as gender, experience in the firm and age clearly influenced their trading behaviour. Our findings shed new light on the behavioural drivers of financial decision-making in a saving-for-retirement setting, and on the crucial importance of the need for the financial industry and policy makers to address the growing onus put on ill-equipped non-professional financial decision makers. JEL Codes. G12, G41, J26, C3

Pricing carbon risk:Investor preferences or risk mitigation?

Do banks charge an environmental premium when lending to publicly listed firms? Using a unique and comprehensive database on carbon emissions, we find that higher carbon emissions are associated with higher loan spreads. This effect exists for loans arranged by all lenders suggesting that spread premia are driven by environmental risks rather than investor preferences. Consistent with ex-post risk, companies without appropriate board-level responsibility pay higher spreads. While countries might introduce effective legislation to mitigate the effects of climate change, our results indicate that there is scope for a market-based solution to complement explicit environmental regulation

Exporting polllution:: Where do multinational firms emit co2?

Over the last few decades, the number of weather-related natural disasters has been steadily rising. As signs of climate change accumulate, countries around the globe are adopting strict regulations designed to curb greenhouse gas emissions from industrial production, generally considered to be the primary cause of global warming. However, countries vary widely in how they design and enforce environmental laws. This paper1examines the polluting behavior of multinational companies in the 2010s with respect to the stringency of environmental policies in their home countries and abroad. Using novel microdata about international firms’ CO2 emissions across countries, the authors focus on the geographic allocation of pollution. A cross-sectional analysis allows to explore further the differences in multinational firms’ polluting behaviors among industries and governance structures

Exporting Pollution

Despite awareness of the detrimental impact of CO2 pollution on the world climate, countries vary widely in how they design and enforce environmental laws. Using novel micro data about firms’ CO2 emissions levels in their home and foreign countries, we document that firms headquartered in countries with strict environmental policies perform their polluting activities abroad in countries with relatively weaker policies. These effects are stronger for firms in high-polluting industries and with poor corporate governance characteristics. Although firms export pollution, they nevertheless emit less overall CO2 globally in response to strict environmental policies at home

The importance of international coordination of environmental policies

The US Treasury Secretary Janet Yellen called on 6 July 2021 for tighter international coordination on carbon environmental policies. So why can’t individual countries implement their own environmental policies in an effective fashion so that global warming will be slowed down