Relationship Between Climate Risk and Physical and Organizational Capital

Kiridaran Kanagaretnam (), Gerald Lobo () and Lei Zhang ()
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Kiridaran Kanagaretnam: York University
Gerald Lobo: University of Houston
Lei Zhang: York University

Management International Review, 2022, vol. 62, issue 2, No 4, 245-283

Abstract: Abstract We investigate the relationship between climate risk and corporate investment in physical and organizational capital using an international sample of firms from 39 countries. Our main findings show that climate risk is positively associated with physical capital but is negatively related to organizational capital. We also explore the effects of climate vulnerability on these relationships and find that the positive relationship between climate risk and physical capital is mainly driven by climate-nonvulnerable industries, while the negative relationship between climate risk and organizational capital is principally driven by climate-vulnerable industries. Overall, our findings have significant implications for both domestic and multinational enterprises that engage in long-term investments against the background of climate change.

Keywords: Climate risk; Corporate investment; Physical capital; Organizational capital (search for similar items in EconPapers)
JEL-codes: E22 G39 M16 M21 Q54 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s11575-022-00467-0

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