How Does Climate Policy Uncertainty Affect Excessive Corporate Debt? The Case of China

Xiaohang Ren, Jianing Qin () and Kangyin Dong ()
Additional contact information
Jianing Qin: School of Business, Central South University, Changsha 410083, P. R. China

Journal of Environmental Assessment Policy and Management (JEAPM), 2022, vol. 24, issue 02, 1-36

Abstract: This paper explores the direct and indirect relationship between climate policy uncertainty and excessive corporate debt, and focuses on the moderating effect of financing constraints. We use the climate policy uncertainty index to represent climate policy uncertainty, and use the Kaplan and Zingales (KZ) index to represent financing constraints. Our study employs data from Chinese non-financial listed companies for the period 2007–2020. The results show that climate policy uncertainty not only directly curbs excessive debt, but also indirectly reduces excessive debt by increasing financing constraints. This direct weakening effect is more pronounced in non-state-owned enterprises, high-tech enterprises, and high-carbon enterprises. Moreover, the financing constraints channel is more effective in state-owned enterprises, high-tech enterprises, and high-carbon enterprises. Furthermore, due to the actual situation in China, the direct weakening effect of climate policy uncertainty is very obvious in the central region, while the indirect effect through the financing constraints channel is most obvious in the western region. These empirical findings will help policymakers, managers, and financial institutions to reconsider financing risk under climate policy uncertainty.

Keywords: Climate policy uncertainty; financing constraints; excessive corporate debt; moderating effect (search for similar items in EconPapers)
JEL-codes: C33 G32 Q58 (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
http://www.worldscientific.com/doi/abs/10.1142/S1464333222500259
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:wsi:jeapmx:v:24:y:2022:i:02:n:s1464333222500259

Ordering information: This journal article can be ordered from

DOI: 10.1142/S1464333222500259

Access Statistics for this article

Journal of Environmental Assessment Policy and Management (JEAPM) is currently edited by Thomas Fischer

More articles in Journal of Environmental Assessment Policy and Management (JEAPM) from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().