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Corporate carbon risk amidst world policy uncertainty: An international perspective

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  • Rabbani, Mustafa Raza
  • Kiran, Madiha
  • Bouri, Elie
  • Alsharif, Mohammad

Abstract

Unlike most studies that examine economic policies’ influence on firm performance and investment decisions, we investigate the impact of global policy uncertainty on carbon risk in 2452 non-financial firms across 89 countries during 2002–2023. A baseline regression, along with two-step generalized method of moments and two-stage least squares methods, reveals world policy uncertainty’s significantly negative influence on corporate carbon risk. This result holds across regions and firm sizes. These findings can provide managers and policymakers with new insights into the emerging landscape of carbon risk and world policy uncertainty.

Suggested Citation

  • Rabbani, Mustafa Raza & Kiran, Madiha & Bouri, Elie & Alsharif, Mohammad, 2026. "Corporate carbon risk amidst world policy uncertainty: An international perspective," Finance Research Letters, Elsevier, vol. 87(C).
    • Handle: RePEc:eee:finlet:v:87:y:2026:i:c:s1544612325022573
    DOI: 10.1016/j.frl.2025.109004
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    JEL classification:

    • G00 - Financial Economics - - General - - - General
    • G1 - Financial Economics - - General Financial Markets
    • G3 - Financial Economics - - Corporate Finance and Governance
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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