Does the subsidiary's climate risk matter? Evidence from the stock price crash

Xiaoyuan Liu, Deli Wang, Wenqi Han and Shangrui Wu

Economics Letters, 2024, vol. 244, issue C

Abstract: Combining satellite climate data with the subsidiaries’ geographical locations of listed firms in China, we document a significant positive relation between subsidiary-level climate risk exposure and future stock price crash risk of conglomerate. The results are stronger for firms with higher CEO performance pressure, higher subsidiary climate risk management costs and weaker external governance. Our findings shed light on the economic consequences of climate risks at the subsidiary level.

Keywords: Subsidiary; Climate risk; Stock price crash risk (search for similar items in EconPapers)
JEL-codes: G31 G32 Q54 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:244:y:2024:i:c:s0165176524004361

DOI: 10.1016/j.econlet.2024.111952

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