Does climate policy uncertainty matter for bank value?

Mengting Fan, Zan Mo, Huijian Fu (), Tsung-Hsien Wu, Zili Chen and Yue He
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Mengting Fan: Guangdong University of Technology
Zan Mo: Guangdong University of Technology
Huijian Fu: Guangdong University of Technology
Tsung-Hsien Wu: College of Management, Fu Jen Catholic University
Zili Chen: South China University of Technology
Yue He: Guangdong University of Technology

Economic Change and Restructuring, 2024, vol. 57, issue 2, No 39, 28 pages

Abstract: Abstract We examine whether and how climate policy uncertainty (CPU) affects bank value. Based on a sample of Chinese listed banks, we find that CPU is negatively associated with bank value, irrespective of bank type and bank size. Moreover, the increased CPU exacerbates the negative effects on bank value of the ratio of non-performing loans to total loans (NPL), operational efficiency (OE), and leverage ratio (LEV), suggesting that NPL, OE, and LEV are possible channels through which CPU harms bank value. The policy implication is that bank equity investors need to take the impact of CPU into account when deciding their investment portfolios while bankers and regulators need to improve some key financial indicators to reduce the negative impact of CPU.

Keywords: Climate policy uncertainty; Bank value; Climate change (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s10644-024-09651-8

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