Carbon risk and trade credit

Hamdi Ben-Nasr, Shadin Masry, Abdullah-Al Masum and Zeineb Ouni

International Review of Economics & Finance, 2025, vol. 103, issue C

Abstract: Our study, focusing on US-listed companies, reveals that high carbon risk can hinder a company's ability to obtain trade credit. This negative impact is channeled primarily via a company's performance volatility, creditworthiness, and information asymmetry. Additionally, a company's negative environmental image, such as its emitter-category industry classification, can exacerbate the issue. However, corporate environmental responsibility and good internal governance can assist in mitigating the negative impact. This research offers valuable insights for policymakers and corporations, underscoring the significance of addressing carbon risk.

Keywords: Carbon risk; Trade credit; Creditworthiness; Suppliers (search for similar items in EconPapers)
JEL-codes: G31 G32 Q54 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:103:y:2025:i:c:s105905602500588x

DOI: 10.1016/j.iref.2025.104425

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