Generosity under environmental pressure: Climate change exposure and corporate philanthropy

Yuqiang Cao, Yunxin Liu, Meiting Lu, Yaowen Shan and Yanglan Zu

International Review of Financial Analysis, 2025, vol. 104, issue PA

Abstract: This study examines the impact of firm-specific climate change exposure on the corporate philanthropy activities of Chinese firms. Our results show that climate change exposure significantly promotes corporate philanthropic donations by mitigating external pressures, maintaining corporate reputations, and stabilizing stock prices. Heterogeneity analyses indicate that the positive effect of climate change exposure is more pronounced for small and young firms, non-state-owned enterprises, and firms with higher equity incentives. The effect is also stronger in contexts characterized by high industry concentration, climate sensitivity, and the strong regional influence of Confucianism. Further analysis suggests that corporate philanthropy is particularly driven by climate change exposure that is linked to positive sentiments and to the physical and regulatory aspects of climate change exposure. Overall, the findings provide new insights into how a firm strategically responds to its exposure to climate change through its philanthropic activities.

Keywords: Climate change exposure; Corporate philanthropy; Reputation (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:104:y:2025:i:pa:s1057521925004235

DOI: 10.1016/j.irfa.2025.104336

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