Featured Research

from universities, journals, and other organizations

Uncertain Climate Regulations: Why Corporations Still Invest

Date:
September 21, 2009
Source:
Wiley-Blackwell
Summary:
It is often thought that firms will react by adopting a "wait and see" strategy in order to stave off spending any unnecessary capital on unstable or uncertain investments. New research shows that this is not necessarily the case, and firms do not always postpone such investments until the last possible moment.

Firms and corporations frequently need to take investment decisions without knowing if future regulation will support or threaten their investment. This is especially true in energy intensive industries that face high uncertainty on future climate policies. For example in the electricity industry, the optimal investment choices of firms are dependent on the design of future climate regulations.

Related Articles


It is often thought that firms will react by adopting a “wait and see” strategy in order to stave off spending any unnecessary capital on unstable or uncertain investments. The latest research from the Journal of Management Studies shows that this is not necessarily the case, and firms do not always postpone such investments until the last possible moment.

Previous research has usually explained corporate decision making with either economic or social logic. This study creates a link between the two schools of thought that is vital to understand why firms invest in spite of large regulatory uncertainties and how firms manage the challenge of reducing their carbon foot print.

The study establishes a chain of evidence how the necessity to comply with social expectations drive investments in the electricity industry. Furthermore, it uses an economic rational to show that firms that expect to reap benefits from investing before other, slower competitors, or those that recognize internal synergies with other house investments, are often more likely to react and invest sooner rather than later.


Story Source:

The above story is based on materials provided by Wiley-Blackwell. Note: Materials may be edited for content and length.


Journal Reference:

  1. Hoffmann et al. Regulatory Uncertainty: A Reason to Postpone Investments? Not Necessarily. Journal of Management Studies, 2009; 46 (7): 1227 DOI: 10.1111/j.1467-6486.2009.00866.x

Cite This Page:

Wiley-Blackwell. "Uncertain Climate Regulations: Why Corporations Still Invest." ScienceDaily. ScienceDaily, 21 September 2009. <www.sciencedaily.com/releases/2009/09/090921162236.htm>.
Wiley-Blackwell. (2009, September 21). Uncertain Climate Regulations: Why Corporations Still Invest. ScienceDaily. Retrieved January 29, 2015 from www.sciencedaily.com/releases/2009/09/090921162236.htm
Wiley-Blackwell. "Uncertain Climate Regulations: Why Corporations Still Invest." ScienceDaily. www.sciencedaily.com/releases/2009/09/090921162236.htm (accessed January 29, 2015).

Share This


More From ScienceDaily



More Science & Society News

Thursday, January 29, 2015

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

'Brand Blocker' Glasses Blur Ads in Real Time

'Brand Blocker' Glasses Blur Ads in Real Time

Buzz60 (Jan. 28, 2015) A team of college students design and build a pair of goggles that will obscure any corporate branding from your field of vision. Jen Markham (@jenmarkham) has the story. Video provided by Buzz60
Powered by NewsLook.com
Boeing's Profit Soars

Boeing's Profit Soars

Reuters - Business Video Online (Jan. 28, 2015) Boeing delivered more commercial planes, especially 737s and 787s, fueling profit. But it issued a mixed outlook. Fred Katayama reports. Video provided by Reuters
Powered by NewsLook.com
Moscow Exhibition Showcases Gulag Letters

Moscow Exhibition Showcases Gulag Letters

AFP (Jan. 28, 2015) Written on cigarette packs or scraps of newspaper, embroidered with a fishbone on shreds of cloth or scratched on birch bark, clandestine letters from the Soviet Gulag were composed by any means prisoners had. Duration: 01:00 Video provided by AFP
Powered by NewsLook.com
Google High-Speed Service Coming to 4 Cities

Google High-Speed Service Coming to 4 Cities

AP (Jan. 28, 2015) Google is expanding its fiber-optic high-speed internet service to four cities in the Southeastern US. The company selected Atlanta, Charlotte, Raleigh and Nashville and their surrounding communities. (Jan. 28) Video provided by AP
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:

Strange & Offbeat Stories


Science & Society

Business & Industry

Education & Learning

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile: iPhone Android Web
Follow: Facebook Twitter Google+
Subscribe: RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins