Climate change exposure and corporate culture: A text-based approach

Sirimon Treepongkaruna, Pornsit Jiraporn, Khine Kyaw and Chaiyuth Padungsaksawasdi

International Review of Economics & Finance, 2024, vol. 95, issue C

Abstract: Utilizing unique measures of climate change vulnerability and corporate culture generated through cutting-edge textual analysis, we explore the effects of firm-specific exposure to climate change on corporate culture. Based on a sample of over 46,000 U.S. observations from 2001 to 2018, our findings demonstrate that firms with greater exposure to climate change have a significantly stronger corporate culture. Companies recognize the value of a strong corporate culture in helping them navigate the unpredictable environment produced by climate change. Therefore, when more exposed to climate change, firms are more driven to promote a robust corporate culture. In particular, an increase in climate change exposure by one standard deviation strengthens corporate culture by 3.12%–37.70%.

Keywords: Climate change; Corporate culture; Global warming; Textual analysis; Machine learning (search for similar items in EconPapers)
JEL-codes: G30 G32 M14 Q54 Q56 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:95:y:2024:i:c:s1059056024004891

DOI: 10.1016/j.iref.2024.103497

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