Corporate green transition and financial risk: Evidence from China's micro-enterprises

Fenfen Wang, Yu Zhang, Qingfeng Luo and Can Wang

Finance Research Letters, 2025, vol. 79, issue C

Abstract: Amid growing resource and environmental challenges, corporate green transition (CGT) is crucial. Using micro-level firm data, this study examines the impact of CGT on corporate financial risk while analyzing its underlying mechanisms. Various robustness tests show that CGT significantly lowers financial risk. Mechanism analysis reveals that CGT lowers financial risk by reducing energy consumption intensity, enhancing environmental governance performance, and fostering green technological innovation. Heterogeneity studies show that CGT's effects on financial risk vary by region, industry, and property rights. This study provides empirical evidence for corporate risk management and green development.

Keywords: Corporate green transition; Financial risk; Environmental performance; Green technological innovation; Energy intensity (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:79:y:2025:i:c:s1544612325006087

DOI: 10.1016/j.frl.2025.107347

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