Climate risk and deployment of corporate resources to working capital

Muhammad Farooq Ahmad, Nihat Aktas and Ettore Croci

Economics Letters, 2023, vol. 224, issue C

Abstract: Using a large sample of US listed firms, we find that exposure to climate risk is negatively associated with working capital. This effect is accentuated in carbon-intensive industries and firms facing financial difficulties. These findings suggest that climate risk pressures firms to release unnecessary resources allocated to working capital, a result consistent with the disciplinary channel.

Keywords: Climate risk; Working capital; Carbon intensity; Financial difficulty (search for similar items in EconPapers)
JEL-codes: G30 G31 Q54 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165176523000277
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:224:y:2023:i:c:s0165176523000277

DOI: 10.1016/j.econlet.2023.111002

Access Statistics for this article

Economics Letters is currently edited by Economics Letters Editorial Office

More articles in Economics Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().