In this study we examine, within the context of the European Union Emission Trading Scheme, whether firms' ability to pass through carbon costs affects the link between carbon emission and corporate financial performance. Our results, controlling for the endogenous relationship between carbon emission and financial performance, and robust to a number of alternative financial performance measures, demonstrate that good carbon emission performance does not always pay off. In fact, we find that lower levels of carbon emission are only rewarded if firms are not able to pass on carbon costs to consumers, either due to industry characteristics or firm‐specific carbon efficiency. Our results are in line with the view that as pollution is associated with increasing environmental costs, this negative impact of pollution on financial performance is mitigated for “carbon cost pass through” firms.

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Since the financial crisis of 2008, next to banks, insurers have received increasing attention from researchers and regulators because of their crucial role in the financial system. A key point for a stable insurer is its capital structure, i.e. the choice between equity, debt and provisions in financing its operations. Based on earlier work a quickly developing literature has directly applied capital structure theories (in particular trade-off and pecking order) from corporate finance to insurers' financing choices. Corporate finance concepts used herein however, are developed for industrial firms. In this paper we provide an overview of the literature on the capital structure of insurers, but contribute by systematically clarifying how to account for the specificities of insurers when transferring the trade-off and pecking-order logic from an industrial to an insurer context. This way, we add several new insights on an insurer's choice between equity, financial debt and provisions. In particular, we are able to explain why, as compared to industrial firms, insurers use less financial debt, and why insurers focus so strongly on self-financing. Finally, we identify multiple avenues for future research.

Research on the question of what makes firms perform well has shown that product market competition, financial pressure and ownership or ownership identity are important performance drivers. Recently the issue of whether or not their impact is influenced by environmental or contextual characteristics has received increasing attention. In this paper we test, on a sample of Belgian firms, whether performance drivers behave differently in a non-quoted environment as compared to a quoted one. Our main result is that the impact of competition, financial pressure and family control does indeed depend upon whether the firm is quoted or not. Overall, for nonquoted companies the performance drivers do not enhance performance and in most cases are even detrimental. For quoted companies however the results are just the opposite. We find that this difference in driver functioning explains the better performance of quoted firms vis-à-vis their private peers.

a b s t r a c t a r t i c l e i n f o A stock listing usually reflects easy access to external equity financing. Although scant empirical evidence exists on the matter, the literature suggests that the enhanced standing towards creditors -which would result in easier access to debt financing -is an extra advantage of being publicly quoted. This paper tests whether a stock listing leads to more flexibility of debt financing, using a data set of listed and comparably large unlisted companies. The data reveals that listing mainly increases the flexible use of debt financing. The difference between listed and unlisted firms is most apparent when investment opportunities tend to arrive in low-cash-flow states. Furthermore, as the unlisted firms in the dataset are all large consolidating business groups, the results indicate that a group structure does not substitute for listing. The results are robust to different estimation methods.