Impact of the corporate response to climate risk on financial leverage and systematic risk

Akitoshi Ito and Kenichi Nagasawa

Applied Economics Letters, 2024, vol. 31, issue 8, 728-731

Abstract: This study examines how firms’ responses to climate risk affect the financial leverage through an impact on the asset beta. Considering the 2015 Paris Agreement about greenhouse gas reduction as a natural experiment on Japanese manufacturing firms, we observe that the asset beta increased and financial leverage decreased for high emission firms after the agreement was signed. Further, a significant decline was observed for the leverage of high emission firms experiencing a sharp rise in the asset beta.

Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/13504851.2022.2146643 (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:taf:apeclt:v:31:y:2024:i:8:p:728-731

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEL20

DOI: 10.1080/13504851.2022.2146643

Access Statistics for this article

Applied Economics Letters is currently edited by Anita Phillips

More articles in Applied Economics Letters from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().