Temperature and corporate risk taking in China

Mengling Zhou, Kangqi Jiang and Zhongfei Chen

Finance Research Letters, 2022, vol. 48, issue C

Abstract: This article estimates how temperature change affects corporate risk-taking by using data gathered on Chinese non-financial listed enterprises during 2007 and 2019. We find that temperature significantly hinders risk-taking behaviors, and such a negative effect persists after a series of robustness tests. Moreover, heterogeneity analysis demonstrates that this negative relationship between temperature and risk-taking is more significant for non-state-owned enterprises, small enterprises, and labor-intensive enterprises than other enterprises. The mechanism analysis reveals that the attenuation effects of temperature change on risk taking is mediated by corporate financing constraints.

Keywords: Temperature; Corporate risk taking; Climate change; China (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:48:y:2022:i:c:s1544612322001271

DOI: 10.1016/j.frl.2022.102862

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