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The nexus between climate risk and corporate green innovation: the moderating role of supply chain finance

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  • Zhao, Hongwei
  • Liao, Weidong

Abstract

Amid escalating climate risk, this study investigates the impact of climate risk on corporate green innovation and explores the moderating role of supply chain finance, using panel data from Chinese A-share listed firms from 2014 to 2024. The findings reveal that climate risk fosters corporate green innovation through three mechanisms: corporate strategic sustainable development behavior, as evidenced by ESG performance and digital transformation; heightened external attention in market governance, driven by social attention and analysts’ attention; and expanded government intervention through environmental regulations and green subsidies. As a moderator, supply chain finance amplifies the direct impact of climate risk and improves the efficiency of its transmission mechanisms, thereby reinforcing its positive effect on green innovation. This study provides novel insights into leveraging financial instruments to support sustainability under climate uncertainty.

Suggested Citation

  • Zhao, Hongwei & Liao, Weidong, 2025. "The nexus between climate risk and corporate green innovation: the moderating role of supply chain finance," Finance Research Letters, Elsevier, vol. 85(PB).
    • Handle: RePEc:eee:finlet:v:85:y:2025:i:pb:s154461232501253x
    DOI: 10.1016/j.frl.2025.107995
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    1. Ran Yi & Yunfan Zhang & An Chen, 2026. "Does corporate climate risk promote climate response actions? Empirical evidence from China," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 31(3), pages 1-33, March.

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    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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