Carbon risk and corporate capital structure

被引:175
作者
Nguyen, Justin Hung [1 ]
Phan, Hieu, V [2 ]
机构
[1] Victoria Univ Wellington, Wellington Sch Business & Govt, 23 Lambton Quay, Wellington 6011, New Zealand
[2] Univ Massachusetts Lowell, Manning Sch Business, 72 Univ Ave, Lowell, MA 01854 USA
关键词
Carbon risk; Capital structure; Financial distress; Financial constraint; STRUCTURE CHOICE; STRUCTURE DECISIONS; ENVIRONMENTAL RISK; MARKET VALUATION; CROSS-SECTION; CONSTRAINTS; GREEN; COST; DETERMINANTS; PROTECTION;
D O I
10.1016/j.jcorpfin.2020.101713
中图分类号
F8 [财政、金融];
学科分类号
0202 ;
摘要
This research exploits Australia's ratification of the Kyoto Protocol, which mandates the country to reduce carbon emissions, thereby exposing Australian firms to increased carbon risk, as a quasi-natural experiment to examine the causal effect of carbon risk on firm capital structure. We find that the Kyoto Protocol ratification leads to a decrease in financial leverage of heavy carbon emitting firms and such a decrease is more pronounced for financially constrained firms. Further analysis indicates that increased carbon risk leads to higher financial distress risk, which motivates firms to decrease financial leverage.
引用
收藏
页数:21
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