Firm-Value Effects of Carbon Emissions and Carbon Disclosures: Evidence from Taiwan

SYNOPSIS Extant accounting research based on data from the United States, Europe, and Australia finds that increases in carbon emissions are associated with lower firm value. However, recent research indicates that investor perspectives on corporate social responsibility (CSR) in other parts of the world differ from those of Western investors. This study investigates whether increases in carbon emissions, as one indicator of poor CSR performance, are also associated with a lower firm value in Taiwan. Using carbon disclosure data from Taiwanese-listed companies between 2012 and 2016, we find that firm value is positively associated with carbon emissions, which contrasts with the findings of extant research. Likewise, firm value is not associated with a combined measure of financial information and carbon emissions in Taiwan. Our findings suggest that international generalizations of the findings of the extant research on the relationship between carbon emissions and firm value should be undertaken with caution. JEL Classifications: G32; M4; M48; Q56.