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Firm-level climate change risk and corporate debt maturity

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  • Goodell, John W.
  • Palma, Alessia
  • Paltrinieri, Andrea
  • Piserà, Stefano

Abstract

Exploiting a sample of worldwide listed firms, we explore the effect of firm-level climate change exposure on debt maturity structure. We find that climate change risk is negatively and statistically significantly associated with long-term maturity debt issuance. Further, we find that the climate change risk-debt maturity structure relationship is non-linear and changes according to firm-specific, country legal origins and macroeconomic conditions. We confirm our results by running several robustness tests to reduce endogeneity concerns, sample selection biases, and econometric model specification. Taken together, our evidence reveals firm debt maturity preferences when climate change risk increases, extending the literature on both climate change effects on financial markets as well as firm-level determinants of maturity structure determinants.

Suggested Citation

  • Goodell, John W. & Palma, Alessia & Paltrinieri, Andrea & Piserà, Stefano, 2025. "Firm-level climate change risk and corporate debt maturity," Journal of International Money and Finance, Elsevier, vol. 152(C).
    • Handle: RePEc:eee:jimfin:v:152:y:2025:i:c:s0261560625000105
    DOI: 10.1016/j.jimonfin.2025.103275
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    1. Ruizhi Liu & Jiajia Li & Mark Wu, 2025. "The Impact of Climate Change Risk on Corporate Debt Financing Capacity: A Moderating Perspective Based on Carbon Emissions," Sustainability, MDPI, vol. 17(14), pages 1-37, July.

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    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • 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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