Climate risk and firms’ R&D investment: Evidence from China
This paper investigates the impact of regional climate risk on firms' R&D investment using data from 23854 firm-year in China from 2008 to 2021. We find that regional climate risk has a significantly negative impact on firms' R&D investment, which shows that climate risk inhibits firms' innovation. In addition, the above-mentioned effect is more pronounced in firms with lower cash holdings and lower manager shareholdings. The mechanism analysis shows that climate risk reduces firms' R&D investment by lowering firms' profitability and exacerbating financing constraint. Further analysis based on China's institutional environment also shows that the above impact of climate risk on firms' R&D investment is more pronounced for firms with non-state property right and lower government subsidies.
Authors
- Yong Wang (ORCID: https://orcid.org/0000-0003-1227-5960)
- Chao Wang (ORCID: https://orcid.org/0000-0002-4915-2975)
Publication Details
- Journal
- International Review of Economics & Finance
- Published
- 2025-03-14
- DOI
- https://doi.org/10.1016/j.iref.2025.104066
- Citations
- 10
- Primary Topic
- Climate Change Policy and Economics
- Type
- article
- Field-Weighted Citation Impact
- 31.31
Funders
- Natural Science Foundation of Shandong Province
- National Office for Philosophy and Social Sciences