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How climate risk drives corporate green innovation: Evidence from China

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  • Tian, Ye
  • Chen, Songbo
  • Dai, Li

Abstract

This study examines the link between climate risk perception (CRP) and corporate green innovation (CGI) in Chinese firms. Using the MD&A, we introduce a novel method to assess climate risk, employing Word2Vec to construct CRP based on word patterns for A-share listed firms. Results show a strong positive relationship between CRP and CGI, notably in high-tech and state-owned enterprises. Firms excelling in environmental governance and digital technologies tend to pursue green innovation in response to climate risks. Our findings offer fresh insights into evolving firm perceptions of climate risks and their influence on green innovation.

Suggested Citation

  • Tian, Ye & Chen, Songbo & Dai, Li, 2024. "How climate risk drives corporate green innovation: Evidence from China," Finance Research Letters, Elsevier, vol. 59(C).
    • Handle: RePEc:eee:finlet:v:59:y:2024:i:c:s1544612323011340
    DOI: 10.1016/j.frl.2023.104762
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    References listed on IDEAS

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    Cited by:

    1. Yang, Jinxuan & Hui, Ning, 2024. "How digital finance affects the sustainability of corporate green innovation," Finance Research Letters, Elsevier, vol. 63(C).
    2. Chen, Qianqian, 2024. "From concept to capital: Investigating the influence of green innovation on equity financing in BRICS economies," International Review of Financial Analysis, Elsevier, vol. 93(C).
    3. Qin, Meng & Zhu, Yujie & Xie, Xin & Shao, Xuefeng & Lobonţ, Oana-Ramona, 2024. "The impact of climate risk on technological progress under the fourth industrial era," Technological Forecasting and Social Change, Elsevier, vol. 202(C).

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    More about this item

    Keywords

    Corporate green innovation; Climate risk; MD&A; Textual analysis;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G40 - Financial Economics - - Behavioral Finance - - - General
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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