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Climate transition risk and bank risk-taking: The role of digital transformation

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  • Liu, Zhonglu
  • Li, Jun
  • Sun, Haibo

Abstract

Using data of Chinese commercial banks from 2010 to 2020, this paper empirically examines the role of digital transformation (DT) in moderating the impact of climate transition risk (CTR) on bank risk-taking. The results show that DT effectively restrains the impact of CTR on bank risk-taking. In addition, the moderating effect of DT is more prominent for small-scale banks, banks with a high concentration of high-carbon industry loans, and banks with low DT. These findings highlight the need for banks to undertake DT and provide supporting evidence for banks to address CTR through DT.

Suggested Citation

  • Liu, Zhonglu & Li, Jun & Sun, Haibo, 2024. "Climate transition risk and bank risk-taking: The role of digital transformation," Finance Research Letters, Elsevier, vol. 61(C).
    • Handle: RePEc:eee:finlet:v:61:y:2024:i:c:s1544612324000588
    DOI: 10.1016/j.frl.2024.105028
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    Cited by:

    1. Pan, Zhilei & Li, Shouwei & Li, Jingwei & Gong, Chen, 2024. "Air pollution and bank risk taking: Evidence from China," Finance Research Letters, Elsevier, vol. 65(C).
    2. Liu, Zhonglu & Pang, Tengfei & Sun, Haibo, 2024. "Decarbonization policy and high-carbon enterprise default risk: Evidence from China," Economic Modelling, Elsevier, vol. 134(C).

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