Climate risk exposure and debt concentration: Evidence from Chinese listed companies

We examine the impact of firm-level climate risk exposure (CRE) on the debt concentration choices of Chinese listed companies over the period 2010-2021. Our findings suggest that CRE prompts firms to choose debt structures with higher concentration, and this relationship holds true for both physical and transition risks. Further analysis reveals that this effect is more pronounced among firms with higher default risk, restricted access to capital, and lower accounting quality. Our findings remain solid to a battery of robustness tests. Collectively, our study sheds light on the economic consequences of through the lens of firms' debt concentration adjustments.