Climate Change and Corporate Leverage Manipulation: Evidence from China

Chao Yuan, Xiaoran Kong, Kung-Cheng Ho and Guifang Liu

Emerging Markets Finance and Trade, 2025, vol. 61, issue 9, 2823-2845

Abstract: This study examines the effect of climate change on corporate leverage manipulation using data from Chinese listed firms. The results show that climate change has significantly increased the degree of corporate leverage manipulation. Mechanism analysis suggests that climate change affects the degree of corporate leverage manipulation through financing constraints. Additionally, under the influence of climate change, firms tend to engage in leverage manipulation through fake equity real debt (FERD) means. Heterogeneity analysis shows that the impact of climate change on leverage manipulation is more significant for firms with weaker regional regulation, lower regional marketization, less regional banking competition, non-state-owned firms, and lower analyst coverage. Economic consequences suggest that corporate leverage manipulation as impacted by climate change increases the likelihood of future financial distress and further reduces a firm’s future value.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/1540496X.2025.2465443 (text/html)
Access to full text is restricted to subscribers.

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:mes:emfitr:v:61:y:2025:i:9:p:2823-2845

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/MREE20

DOI: 10.1080/1540496X.2025.2465443

Access Statistics for this article

More articles in Emerging Markets Finance and Trade from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().