Firm-level climate change risk and corporate debt maturity

John W. Goodell, Alessia Palma, Andrea Paltrinieri and Stefano Piserà

Journal of International Money and Finance, 2025, vol. 152, issue C

Abstract: Exploiting a sample of worldwide listed firms, we explore the effect of firm-level climate change exposure on debt maturity structure. We find that climate change risk is negatively and statistically significantly associated with long-term maturity debt issuance. Further, we find that the climate change risk-debt maturity structure relationship is non-linear and changes according to firm-specific, country legal origins and macroeconomic conditions. We confirm our results by running several robustness tests to reduce endogeneity concerns, sample selection biases, and econometric model specification. Taken together, our evidence reveals firm debt maturity preferences when climate change risk increases, extending the literature on both climate change effects on financial markets as well as firm-level determinants of maturity structure determinants.

Keywords: Climate change; Debt maturity; Corporate debt structure; Climate change risk (search for similar items in EconPapers)
JEL-codes: G12 G30 G32 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jimfin:v:152:y:2025:i:c:s0261560625000105

DOI: 10.1016/j.jimonfin.2025.103275

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