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Carbon risk and trade credit

Author

Listed:
  • Ben-Nasr, Hamdi
  • Masry, Shadin
  • Masum, Abdullah-Al
  • Ouni, Zeineb

Abstract

Our study, focusing on US-listed companies, reveals that high carbon risk can hinder a company's ability to obtain trade credit. This negative impact is channeled primarily via a company's performance volatility, creditworthiness, and information asymmetry. Additionally, a company's negative environmental image, such as its emitter-category industry classification, can exacerbate the issue. However, corporate environmental responsibility and good internal governance can assist in mitigating the negative impact. This research offers valuable insights for policymakers and corporations, underscoring the significance of addressing carbon risk.

Suggested Citation

  • Ben-Nasr, Hamdi & Masry, Shadin & Masum, Abdullah-Al & Ouni, Zeineb, 2025. "Carbon risk and trade credit," International Review of Economics & Finance, Elsevier, vol. 103(C).
    • Handle: RePEc:eee:reveco:v:103:y:2025:i:c:s105905602500588x
    DOI: 10.1016/j.iref.2025.104425
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    JEL classification:

    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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