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Climate risk and corporate cross-boundary digital innovation: An analysis based on the threshold effect of green digital finance

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  • Zhu, Yue
  • Wu, Yuyang

Abstract

This study employs data from Chinese A-share listed firms from 2012 to 2023 to investigate the direct impact and underlying mechanisms by which climate risk (CR) on cross-boundary digital innovation (DI) of traditional firms. The findings indicate that CR significantly enhances DI, which is supported by robustness tests and endogeneity estimates using El Niño index and air ventilation as instrumental variables. Identify three key mechanisms for driving DI: increasing patient capital, analyst attention, and industrial robot application level. In addition, DI in firms with lower financing constraints, non-state-owned, high-polluting industries, and eastern regions are particularly driven by CR. This indicates that DI may be a conscious selection for firms to adapt to climate change, implying that there are business opportunities behind climate change to promote digital-real integration. Finally, the impact of CR on DI is influenced by the threshold effect of green digital finance (GDF). Research provides new insights for policy makers to guide firms to adjust innovation strategies to adapt to climate change from the perspective of coordinated development of green finance and digital finance.

Suggested Citation

  • Zhu, Yue & Wu, Yuyang, 2026. "Climate risk and corporate cross-boundary digital innovation: An analysis based on the threshold effect of green digital finance," Finance Research Letters, Elsevier, vol. 92(C).
    • Handle: RePEc:eee:finlet:v:92:y:2026:i:c:s1544612326000681
    DOI: 10.1016/j.frl.2026.109537
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