TY - JOUR
T1 - When climate risk hits corporate value
T2 - The moderating role of financial constraints, flexibility, and innovation
AU - Naseer, Mirza Muhammad
AU - Guo, Yongsheng
AU - Zhu, Xiaoxian
N1 - Publisher Copyright:
© 2025 The Author(s)
PY - 2025/1/8
Y1 - 2025/1/8
N2 - This study examines the relationship between firms’ exposure to climate risk and their market value using global data from 2002 to 2022. A significant negative relationship between climate risk and firm value is identified, with geographic variation in impact severity. Asia faces the highest risk, followed by Europe, North America, and others. Policy events like the Stern Review and the Paris Agreement influence this relationship. Financial constraints exacerbate the negative effects of climate risk, while financial flexibility and R&D mitigate them. Firms in environmentally sensitive sectors and outside the United States are more vulnerable, and non-G20/non-OECD countries face greater climate challenges.
AB - This study examines the relationship between firms’ exposure to climate risk and their market value using global data from 2002 to 2022. A significant negative relationship between climate risk and firm value is identified, with geographic variation in impact severity. Asia faces the highest risk, followed by Europe, North America, and others. Policy events like the Stern Review and the Paris Agreement influence this relationship. Financial constraints exacerbate the negative effects of climate risk, while financial flexibility and R&D mitigate them. Firms in environmentally sensitive sectors and outside the United States are more vulnerable, and non-G20/non-OECD countries face greater climate challenges.
UR - http://www.scopus.com/inward/record.url?scp=85214328020&partnerID=8YFLogxK
U2 - 10.1016/j.frl.2025.106780
DO - 10.1016/j.frl.2025.106780
M3 - Article
SN - 1544-6123
VL - 74
JO - Finance Research Letters
JF - Finance Research Letters
M1 - 106780
ER -