| dc.description.abstract | This thesis investigates how biodiversity affects firms’ financial performance within the salmon-farming industry. The influence of biodiversity on financial performance is increasingly being acknowledged. Nevertheless, a tangible gap persists in the academic literature regarding this relationship. Utilizing a novel panel dataset compiled from 41 salmon farming companies spanning from 2014 to 2021, this research integrates multiple sources and industry-specific variables to create a unique and international data sample. Our research is twofold. First, we apply a difference-in-differences estimator, defining treatment and control groups, to ascertain the effects of Norway's Traffic Light System – a policy targeting biodiversity – on firms' Return on Assets (ROA). The evidence suggest that the Traffic Light regulation has had a negative effect on financial performance for the companies affected. Second, we use a well-developed dynamic panel generalized method of moments (GMM) estimator to explore the relationship between specific biodiversity variables (sea lice prevalence, sea lice treatments, and escapes) and ROA. The estimator incorporates the dynamic nature of financial performance to address unobserved heterogeneity and endogeneity issues. We find that sea lice treatments and escaped salmon have a negative impact on ROA. However, an alternative treatment method using Hydrogen Peroxide ($H_2O_2$) and sea lice prevalence have a positive impact on ROA. Overall, our research contributes to the growing body of literature on ESG and financial performance and shed light on the intricate interdependencies between biodiversity, regulatory practices, and financial performance in the context of the global salmon farming industry. | |
