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Climate change exposure and corporate culture: A text-based approach

Author

Listed:
  • Treepongkaruna, Sirimon
  • Jiraporn, Pornsit
  • Kyaw, Khine
  • Padungsaksawasdi, Chaiyuth

Abstract

Utilizing unique measures of climate change vulnerability and corporate culture generated through cutting-edge textual analysis, we explore the effects of firm-specific exposure to climate change on corporate culture. Based on a sample of over 46,000 U.S. observations from 2001 to 2018, our findings demonstrate that firms with greater exposure to climate change have a significantly stronger corporate culture. Companies recognize the value of a strong corporate culture in helping them navigate the unpredictable environment produced by climate change. Therefore, when more exposed to climate change, firms are more driven to promote a robust corporate culture. In particular, an increase in climate change exposure by one standard deviation strengthens corporate culture by 3.12%–37.70%.

Suggested Citation

  • Treepongkaruna, Sirimon & Jiraporn, Pornsit & Kyaw, Khine & Padungsaksawasdi, Chaiyuth, 2024. "Climate change exposure and corporate culture: A text-based approach," International Review of Economics & Finance, Elsevier, vol. 95(C).
    • Handle: RePEc:eee:reveco:v:95:y:2024:i:c:s1059056024004891
    DOI: 10.1016/j.iref.2024.103497
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    More about this item

    Keywords

    Climate change; Corporate culture; Global warming; Textual analysis; Machine learning;
    All these keywords.

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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