 Does global climate risk encourage companies to take more risks?Weidong Xu, Xin Gao, Hao Xu and Donghui Li Research in International Business and Finance, 2022, vol. 61, issue C Abstract: This paper employs a large international sample of 167,923 firm-year observations across 43 countries spanning 2001–2016 and finds that both annual and long-run climate risks have significantly positive impacts on corporate risk-taking, which is regarded as value-enhancing. Compared to long-run climate risk, annual climate risk plays a more dominant role. Moreover, we find high individualism and low uncertainty avoidance contribute to the positive effect of climate risk on corporate risk-taking. Compared to larger firms, smaller firms are more motivated to take on more risks when exposed to climate risks. Insurance provides protection for companies to take more risks. Also, country-level corporate governance is found to enhance the positive impacts of climate risks on corporate risk-taking. In addition, after taking endogeneity issues into account and conducting robustness tests, our primary conclusions remain. Keywords: Corporate risk-taking; Climate risk; Corporate governance (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:61:y:2022:i:c:s0275531922000460 DOI: 10.1016/j.ribaf.2022.101658 Access Statistics for this article Research in International Business and Finance is currently edited by T. Lagoarde Segot More articles in Research in International Business and Finance from Elsevier |
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