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Corporate green transition and financial risk: Evidence from China's micro-enterprises

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  • Wang, Fenfen
  • Zhang, Yu
  • Luo, Qingfeng
  • Wang, Can

Abstract

Amid growing resource and environmental challenges, corporate green transition (CGT) is crucial. Using micro-level firm data, this study examines the impact of CGT on corporate financial risk while analyzing its underlying mechanisms. Various robustness tests show that CGT significantly lowers financial risk. Mechanism analysis reveals that CGT lowers financial risk by reducing energy consumption intensity, enhancing environmental governance performance, and fostering green technological innovation. Heterogeneity studies show that CGT's effects on financial risk vary by region, industry, and property rights. This study provides empirical evidence for corporate risk management and green development.

Suggested Citation

  • Wang, Fenfen & Zhang, Yu & Luo, Qingfeng & Wang, Can, 2025. "Corporate green transition and financial risk: Evidence from China's micro-enterprises," Finance Research Letters, Elsevier, vol. 79(C).
    • Handle: RePEc:eee:finlet:v:79:y:2025:i:c:s1544612325006087
    DOI: 10.1016/j.frl.2025.107347
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    1. Han, Yinjie & Guo, Shujuan, 2025. "The synergistic effect between green technology innovation and corporate accounting information quality," Finance Research Letters, Elsevier, vol. 85(PD).
    2. Yang, Rui & Jin, Xianglu & Huang, Wenhui & Wang, Sike, 2025. "Evolutionary game analysis of the driving mechanism for green technology innovation in enterprises: a new quality productive forces perspective," Finance Research Letters, Elsevier, vol. 85(PD).

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