Do climate-exposed firms hold more cash? Global evidence

Rufei Ma, Xinxin Fu, Qiang Ji and Pengxiang Zhai

Economics Letters, 2024, vol. 237, issue C

Abstract: Using a novel global dataset covering firm-level climate change exposure, this paper observes that firms facing greater climate change exposure are significantly holding more cash. This finding is consistent after a series of robustness tests. We further document that more stringent climate policies and greater economic uncertainty amplify the effect of climate change on corporate cash holdings, and firms in countries with more developed capital market are increasing less cash reserves in response to climate change.

Keywords: Cash holdings; Climate change; Financial resilience (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:237:y:2024:i:c:s0165176524001344

DOI: 10.1016/j.econlet.2024.111651

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