The Impact of Climate Risk on Firm Value: Evidence from China’s A-share Market

Aoxue Xie

doi:10.6981/FEM.202501_6(1).0022

Authors

Aoxue Xie

DOI:

https://doi.org/10.6981/FEM.202501_6(1).0022

Keywords:

Climate Risk; Firm Value; Textual Analysis.

Abstract

With the increasing severity of global climate change, climate risk has a wide range of impacts on corporate operations. This paper constructs firm-level climate risk indicators to explore the impact of climate risk on firm value using textual analysis. Based on a sample of Chinese A-share listed companies, we find that increased climate risk significantly reduces firm value. We further confirmed this conclusion through a series of robustness tests. Furthermore, we find that climate risk primarily reduces firm value by increasing financing costs of companies.

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References

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