About this event
This study investigates the intricate relationship between bankruptcy proceedings and climate risk. By constructing a unique dataset spanning business bankruptcies from 2000 to 2023 linked to companies’ environmental indicators, we document that green and brown companies do not face different probabilities of experiencing distress and bankruptcy. However, bankrupted brown firms are more inclined to file for reorganization instead of liquidation and encounter lower bankruptcy costs. To mitigate endogeneity concerns in companies’ bankruptcy decisions, we employ a randomized bankruptcy judge allocation approach to understand how bankruptcy affects firms’ environmental performance. Using post-bankruptcy facility emission data, our findings show that firms undergoing reorganization tend to exhibit lower emissions when compared to their liquidated counterparts. This distinction highlights the significant but previously understudied impact that bankruptcy proceedings can have on a firm’s environmental footprint, suggesting that reorganization efforts may improve environmental performance.
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This event will take place in SAL 2.04, 2nd Floor Conference Room, Sir Arthur Lewis Building, LSE, 32 Lincoln's Inn Fields, London WC2A 3PH.
The building is labelled
SAL
on the map. Enter the building via Lincoln's Inn Fields.
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