What question did this study set out to answer?

To examine how the introduction of crossborder carbon taxes, specifically the European Union Carbon Border Adjustment Mechanism, affects shareholder wealth across purchasing and producing firms.

September 17, 2026Management Science

Crossborder Carbon Taxes and Shareholder Wealth

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Authors

MAMarta Alonso MJMartin Jacob GOGaizka Ormazábal

Discussion

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Overview

Event study reveals negative stock returns for European purchasers under carbon border adjustment policies, indicating equity markets expect crossborder carbon pricing to hurt domestic firms.

Key Points

To examine how the introduction of crossborder carbon taxes, specifically the European Union Carbon Border Adjustment Mechanism, affects shareholder wealth across purchasing and producing firms.
Conducted an event study analyzing stock price reactions to key regulatory announcements regarding the European Union Carbon Border Adjustment Mechanism (CBAM).
Performed cross-sectional analyses comparing European Union purchasers of covered goods against non-European producers, accounting for supply chain locations, anticipated compliance costs, and cost pass-through capabilities.
European Union purchasers of CBAM-covered products exhibited significantly lower stock returns than non-European producers following regulatory announcements.
Negative valuation effects were most severe among European purchasers maintaining non-EU supply chains.
Market penalties were qualitatively larger for firms facing higher CBAM-related expenses and those possessing lower pricing power to pass carbon costs onto trading partners.

Cite This Study

Alonso et al. (2026) studied this question.

synapsesocial.com/papers/6aabb8045f706d05830e76c1 https://doi.org/10.1287/mnsc.2024.07171

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September 17, 2026Management Science

Crossborder Carbon Taxes and Shareholder Wealth

View Full Paper

Ask AI

Bookmark

Authors

MAMarta Alonso MJMartin Jacob GOGaizka Ormazábal

Discussion

Member takes

Overview

Event study reveals negative stock returns for European purchasers under carbon border adjustment policies, indicating equity markets expect crossborder carbon pricing to hurt domestic firms.

Key Points

To examine how the introduction of crossborder carbon taxes, specifically the European Union Carbon Border Adjustment Mechanism, affects shareholder wealth across purchasing and producing firms.
Conducted an event study analyzing stock price reactions to key regulatory announcements regarding the European Union Carbon Border Adjustment Mechanism (CBAM).
Performed cross-sectional analyses comparing European Union purchasers of covered goods against non-European producers, accounting for supply chain locations, anticipated compliance costs, and cost pass-through capabilities.
European Union purchasers of CBAM-covered products exhibited significantly lower stock returns than non-European producers following regulatory announcements.
Negative valuation effects were most severe among European purchasers maintaining non-EU supply chains.
Market penalties were qualitatively larger for firms facing higher CBAM-related expenses and those possessing lower pricing power to pass carbon costs onto trading partners.

Cite This Study

Alonso et al. (2026) studied this question.

synapsesocial.com/papers/6aabb8045f706d05830e76c1 https://doi.org/10.1287/mnsc.2024.07171

View Full Paper

Ask AI

Bookmark