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Temperature and corporate risk taking in China

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  • Zhou, Mengling
  • Jiang, Kangqi
  • Chen, Zhongfei

Abstract

This article estimates how temperature change affects corporate risk-taking by using data gathered on Chinese non-financial listed enterprises during 2007 and 2019. We find that temperature significantly hinders risk-taking behaviors, and such a negative effect persists after a series of robustness tests. Moreover, heterogeneity analysis demonstrates that this negative relationship between temperature and risk-taking is more significant for non-state-owned enterprises, small enterprises, and labor-intensive enterprises than other enterprises. The mechanism analysis reveals that the attenuation effects of temperature change on risk taking is mediated by corporate financing constraints.

Suggested Citation

  • Zhou, Mengling & Jiang, Kangqi & Chen, Zhongfei, 2022. "Temperature and corporate risk taking in China," Finance Research Letters, Elsevier, vol. 48(C).
    • Handle: RePEc:eee:finlet:v:48:y:2022:i:c:s1544612322001271
    DOI: 10.1016/j.frl.2022.102862
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    References listed on IDEAS

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    Cited by:

    1. Kopyrina, Olga & Wu, Kai & Ying, Zhanyu, 2023. "Greening through central inspection: The role of legitimacy pressure and risk-taking," Pacific-Basin Finance Journal, Elsevier, vol. 77(C).
    2. Zhao, Meiyu & Zhang, Bo, 2023. "Credit corruption, financial constraint and corporate innovation: Evidence on China," Finance Research Letters, Elsevier, vol. 53(C).
    3. Hu, Mingsheng & Li, Bowen, 2024. "Potential risks in the easy market access: A perspective from corporate asset-debt maturity mismatch," Research in International Business and Finance, Elsevier, vol. 70(PA).
    4. Zhou, Mengling & Huang, Zizhen & Jiang, Kangqi, 2024. "Environmental, social, and governance performance and corporate debt maturity in China," International Review of Financial Analysis, Elsevier, vol. 95(PA).
    5. Lin, Nan & Chen, Han & Zhang, Pengdong & Liu, Weiqian, 2022. "Does gambling culture affect firms’ investment efficiency?," Finance Research Letters, Elsevier, vol. 49(C).
    6. Pu, Guifang & Xie, Yanxiang & Wang, Kai, 2023. "Board faultlines and risk-taking," Finance Research Letters, Elsevier, vol. 51(C).
    7. Liu, Qi & Wu, Jiejie, 2023. "Strong financial regulation and corporate risk-taking: Evidence from a natural experiment in China," Finance Research Letters, Elsevier, vol. 54(C).

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