Carol Marie Boyer

Green Recovery: How are Environmental Stocks Doing

With a focus on 310 “green” companies, in the industries of biomass, biofuels, clean tech indexes, efficiency, energy storage, fuel cells, geothermal, recycling, green chemicals, environmental building, renewable energy project developers, solar energy, environmentally conscious transportation, and water and wind energy, this article tests the hypothesis that green companies’ financial performance follows that of traditional companies. It also examines how different countries excel at developing environmental solutions in different areas and illuminates the reasons for their successes. Such reasons might include government investment or tax incentives. Finally, this article analyzes how different industries have been performing over time. Key variables investigated include differences in capital expenditures, such as research and development and the sources of firms’ financing. Findings suggest that Nasdaq firms outperform the green firms, although certain green industries dominate the Nasdaq. Other significant results relate to larger equity shares held by insiders in environmental firms. Finally, green firms have larger R&D and capital expenditures compared and better corporate governance than Nasdaq firms.

Performance differences between IPOs in new industries and IPOs in established industries

Purpose - The purpose of this paper is to provide a unique approach to examining issues related to initial public offerings (IPOs). Design/methodology/approach - The price behavior of IPOs in new industries is analyzed relative to IPOs in established industries. Findings - The results show that there are fundamental differences between IPOs of companies in new industries and those in established industries in that there is greater uncertainty regarding future earnings, less competition and fewer barriers to entry. The results indicate that IPOs in new industries outperform IPOs in established industries during holding periods of one to ten years. Furthermore, IPOs in new industries tend to merge less often, declare bankruptcy less often and are delisted less often than firms conducting an IPO in established industries. Originality/value - A longitudinal approach allows analysis of IPOs of firms relative to other IPOs within the same industry that occurred before or after. By performing such a longitudinal study, issues could be examined which would not have been possible to analyze using a cross section of IPOs from a single time period. The usefulness of this study is that it provides new information to the investor when selecting between IPOs in new or established industries, and also when selecting among IPOs of firms entering a new industry in the early, middle or latter stage of its market cycle.

SPACs as Alternative Investments: An Examination of Performance and Factors that Drive Prices

This study provides an analysis of the U.S. market for Special Purpose Acquisition Corporations (SPACs) starting with a description of how the investment vehicles are structured, provides a brief history, explains the purpose that they serve in the IPO market, and documents the sizeable growth of the industry. The analysis provides various descriptive statistics such as the pricing structure, 1st year returns, 1st day returns, trading volume, size, and trust amounts. Lastly, we examine the relationship between the warrant price, share price, and other SPAC variables using regression models.

Voluntary Environmental Regulation and Firm Performance: The Chicago Climate Exchange

This article examines stock return and financial performance of firms that voluntarily participated in the Chicago Climate Exchange’s emissions-reduction program. Findings reveal that the stock price of firms joining the program increased by a small, statistically significant amount during the announcement period. Stocks overperformed by about 8% during the first year after the announcement. Financial performance of participating firms also improved compared to a matched sample of non-participating firms. Results support the hypothesis that sustainable business practices provide quantifiable benefits to participating corporations and do no harm to the financial status of the firm, while potentially improving the environment.

Knightian uncertainty: evidence of uncertainty premium in the capital market

We empirically verify two predictions of asset pricing with a role for uncertainty: return premium to increase with uncertainty, and to decrease with the resolution of uncertainty over time and experience. These properties are found among Initial Public Offerings (IPOs) of new industries where uncertainty is created by innovations of new products and services, and resolution of uncertainty from early IPOs is to decline with later IPOs. Return premium for uncertainty is shown to be separate from all known measurable risks. Evidence that uncertainty is priced also lends support to the notion that investors are in general, averse to uncertainty.

Has the 1987 crash changed the psyche of the stock market?: The evidence from initial public offerings

Purpose - The purpose of this paper is to utilize the initial public offerings (IPO) market to research the effect the stock market crash of 1987 had on the market psyche. Design/methodology/approach - The paper compares the number of IPOs, as well as accounting data during the years surrounding the 1987 crash to determine if there is a change in financial quality. The underwriting fee structure, underpricing and short term price changes during one year prior to and one year following the 1987 crash are examined, as well as the long term returns surrounding the crash. Findings - The stock market crash of 1987 did change the market psyche in the short to medium term. Results show greater risk aversion in the post crash period, as evidenced by fewer IPOs from riskier firms. Pricing is found to be more rational – less one day run-up, less upward adjustment from offering range, and less likely to be overpriced in intermediate and longer terms. Originality/value - The paper demonstrates the importance of market sentiment and may illuminate the causes of market cycles.

The Market for Fine Art and the Economy

This article examines the relationship between the market for art and the economy. The art market has long been an alternative investment for investors seeking capital appreciation as well as enjoyment from the art. Although the market for art has been studied in the financial and economic literature, no studies have looked at the relationship between the economy and the market for art. In this study, economic variables such as inflation, unemployment, the stock market, and interest rates are used to determine how the art market is affected by the economy. Time series regressions are used to establish the relationship and to quantify the effects. An art index is gathered from Art Market Research data. This study finds a strong relationship between the market for art and the economy. In general, the results show that as the economy expands, the market for art improves. There is some evidence of a negative relationship between the stock market and art market in the near term and of a positive relationship when the stock market is lagged two months.

Early Stage Financing of Clean Technology Industries: Does Private Equity Backing Matter?

Clean technology has the ability to transform the global economy by lessening climate change and providing for energy independence and strategic economic growth. This article examines the early stage financing of clean technology industries and the involvement of private equity. Financial comparisons between clean technology firms and other small-cap firms are made in terms of performance, price-toearnings ratios, capital expenditures, and research and development. The influence of private equity due diligence within the clean technology sector is also examined. A survey is used to gather information regarding early stage financing of clean technology firms and use of government grants.

Using contingent valuation with undergraduate students to elicit a community's preferences for wind farm development

This article presents the results of a survey that elicited the value of the perceived net benefits associated with the implementation of a wind farm in a rural community in upstate New York. The survey was designed and administered by upper level undergraduate students enrolled in an environmental economics course at Saint Lawrence University. Results may give instructors interested in introducing more applied research in the classroom an idea of what to expect. The analysis of this project may also suggest policy implications for the implementation of wind farms.

What is the impact of Private and Public R&D on Clean Technology Firms’ Performance? An International Perspective.

ABSTRACT Research and Development (R&D) has often been cited as key to promote the development of clean technologies in both the short and long runs. Robust economic performance for clean technology firms may occur in countries in which R&D is conducted by governments as well as by businesses. The goal of this paper is to examine how private and public R&D affects firm profitability. Utilizing an international data set of clean technology firms, this study finds performance of clean technology firms to be quite favorable when compared to firms in the Morgan Stanley Capital International World Index. The study examines how different countries perform in these industries. Finally, the impact both corporate and public R&D have had on these firms’ performance is analyzed.