Carbon risk and debt financing: An international perspective
作者: Ren, XH; Li, WQ; Duan, K; Urquhart, A
单位: 华中科技大学经济学院 中南大学商学院 澳门城市大学金融学院 伯明翰大学伯明翰商学院
期刊：Journal of International Money and Finance
Abstract: Threatening escalation of carbon emissions has elicited increasing attention to the significance of carbon risk in shaping a firm's debt financing decision. Despite the policy significance, the relationship between carbon risk and debt financing remains to be resolved. This paper provides a firm-level investigation to seek insights into the impact of carbon risk on debt financing. Employing an international dataset covering 24 economies, our results suggest that rising carbon risk leads to debt expansion, validating the liquidity shortage view that carbon risk enlarges firm's liquidity concerns to resort to debt financing. The debt expansion effect of carbon risk is found to be more pronounced in countries with high uncertainty and low socio-economic development, industries with high competition, firms with non-high-tech attributes, low financial constraints, limited growth opportunities, and leverage ratios below the optimal level. Further analysis supports the Porter hypothesis by showing that carbon risk and its resultant debt expansion can enhance corporate performance in a time-lagged pattern.
DOI: 10.1016/j.jimonfin.2025.103294
链接: https://doi.org/10.1016/j.jimonfin.2025.103294