Research on the Impact of Climate Risk on Corporate Stock Price Crash Risk

Climate risk represents a significant financial threat for companies. This study uses a sample of Chinese A-share listed firms from 2007 to 2022 to empirically investigate how climate risk affects stock price crash risk and the mechanisms involved. The findings reveal a strong positive correlation between climate risk and the risk of stock price crashes, suggesting that higher climate risk increases the likelihood of stock price crashes. These results hold true across various tests. Analysis of underlying mechanisms indicates that heightened analyst attention and a stronger commitment to green transition can reduce the adverse effects of climate risk on stock price crash risk. Additionally, the study finds that the influence of climate risk on stock price crash risk is more significant in high-carbon industries and among non-state-owned enterprises.