VGSF - WU Vienna - LC

Steven D. Baker, McIntire School of Commerce

Campus WU D4.0.019 12:00 - 13:30

Organizer WU Vienna

The Fin­ance Brown Bag Sem­inar is held by the In­sti­tute for Fin­ance, Bank­ing and In­sur­ance (WU Vi­enna) and the Vi­enna Gradu­ate School of Fin­ance (VGSF). It serves as a present­a­tion plat­form for PhD stu­dents, fac­ulty mem­bers, and vis­it­ors. An over­view of BBS on the web­site of the In­sti­tute for Fin­ance, Bank­ing and In­sur­ance.

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May 13th, 2019, 12:00-13:30, D4.0.019

Steven D. Baker

Title: "As­set Prices and Port­fo­lios with Ex­tern­al­it­ies"

Ab­stract

Ele­ment­ary port­fo­lio the­ory im­plies that en­vir­on­ment­al­ists op­tim­ally hold more shares of pol­lut­ing firms than non-en­vir­on­ment­al­ists, and that pol­lut­ing firms at­tract more in­vest­ment than other­wise identical non-­pol­lut­ing firms. These res­ults re­flect the de­mand to hedge against high pol­lu­tion states. Pigouvian tax­a­tion can re­verse the ag­greg­ate in­vest­ment res­ults, but en­vir­on­ment­al­ists still over­weight pol­luters. We in­tro­duce coun­ter­vail­ing motives for en­vir­on­ment­al­ists to un­der­weight pol­luters, com­par­ing the im­plic­a­tions when en­vir­on­ment­al­ists co­ordin­ate to in­tern­al­ize pol­lu­tion, or have non­pe­cuni­ary dis­util­ity from hold­ing pol­luter stock. With non­pe­cuni­ary dis­util­ity, in­tro­du­cing a green de­riv­at­ive pro­duct may dra­mat­ic­ally al­ter who in­vests most in pol­luters, but has no im­pact on ag­greg­ate pol­lu­tion.



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