Corporate climate risk exposure and capital structure: Evidence from Chinese listed companies

Yunhe Li and Zhaolong Zhang

Finance Research Letters, 2023, vol. 51, issue C

Abstract: This study investigates how corporate climate risk exposure (CCRE) affects corporate capital structure. We find that CCRE significantly reduces corporate financial leverage, and the result still holds after robustness tests. We further find that the negative impact of CCRE on corporate financial leverage is partly driven by both the corporate capital demand and debt supply effects. We also find that this relationship is more significant for companies with higher physical risk and transition risk. These results suggest that corporate capital structure decisions -change in response to CCRE.

Keywords: Corporate climate risk exposure; Capital structure; Equity issuance; Credit rating; China (search for similar items in EconPapers)
JEL-codes: C22 D81 G15 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:51:y:2023:i:c:s154461232200664x

DOI: 10.1016/j.frl.2022.103488

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