Climate change exposure and the use of short-term debt

Sanghak Choi

Finance Research Letters, 2024, vol. 65, issue C

Abstract: This study investigates the relationship between a firm's exposure to climate change and its preference for short-term debt. Using a comprehensive dataset of U.S. firms from 2002 to 2020 and employing a novel measure of firm-specific climate change exposure, the findings indicate that firms with high exposure are more likely to use short-term debt, particularly for opportunity-related climate change exposure. Propensity score matching and additional robustness analyses support the robustness of our findings. In addition, cross-sectional subsample analyses further suggest that the effect is magnified in climate-sensitive groups and financially constrained firms.

Keywords: Debt maturity choice; Short-term debt; Climate change exposure (search for similar items in EconPapers)
JEL-codes: D81 G30 G32 Q54 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:65:y:2024:i:c:s1544612324006093

DOI: 10.1016/j.frl.2024.105579

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