The European Union Taxonomy on Sustainable Finance is the ¯rst comprehensive classi¯cation designed to identify the extent to which an economic activity is environmentally sustainable. This paper investigates how the EU Taxonomy a®ected corporate investments for Taxonomyeligible companies compared to non-eligible ones. We applied a di®erence-in-di®erence model using a dataset of 130,918 ¯rms from 27 EU Member States, using 2019 as a threshold. Our ¯ndings show that the introduction of the EU Taxonomy per se did not result in an increase in corporate investments among Taxonomy-eligible companies; rather, ¯rms' size and Taxonomyeligibility uncertainty played a key role in explaining variation in corporate investments. The implications are twofold: the participatory and communication approach of the European Commission implemented with the EU Taxonomy is e®ective in nudging corporate investments aimed at sustainability. However, this only happens when the regulation provides an unambiguous sector speci¯cation. Thus, it is important that the regulatory interventions clearly de¯ne what is sustainable.

THE IMPACT OF EU TAXONOMY ON CORPORATE INVESTMENTS / Lucarelli, Caterina; Mazzoli, Camilla; Rancan, Michela; Severini, Sabrina. - In: JOURNAL OF FINANCIAL MANAGEMENT, MARKETS AND INSTITUTIONS. - ISSN 2282-717X. - ELETTRONICO. - 11:01(2023). [10.1142/S2282717X23500044]

THE IMPACT OF EU TAXONOMY ON CORPORATE INVESTMENTS

LUCARELLI, CATERINA
;
MAZZOLI, CAMILLA;SEVERINI, SABRINA
2023-01-01

Abstract

The European Union Taxonomy on Sustainable Finance is the ¯rst comprehensive classi¯cation designed to identify the extent to which an economic activity is environmentally sustainable. This paper investigates how the EU Taxonomy a®ected corporate investments for Taxonomyeligible companies compared to non-eligible ones. We applied a di®erence-in-di®erence model using a dataset of 130,918 ¯rms from 27 EU Member States, using 2019 as a threshold. Our ¯ndings show that the introduction of the EU Taxonomy per se did not result in an increase in corporate investments among Taxonomy-eligible companies; rather, ¯rms' size and Taxonomyeligibility uncertainty played a key role in explaining variation in corporate investments. The implications are twofold: the participatory and communication approach of the European Commission implemented with the EU Taxonomy is e®ective in nudging corporate investments aimed at sustainability. However, this only happens when the regulation provides an unambiguous sector speci¯cation. Thus, it is important that the regulatory interventions clearly de¯ne what is sustainable.
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11566/320935
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