Climate policy uncertainty and asset–liability maturity mismatch

The increasing frequency and ambiguity of climate policy changes have raised concerns about their unintended consequences on corporate financial decisions. This study examines how climate policy uncertainty (CPU) foments corporate asset–liability maturity mismatch by examining its influence on short-term debt for long-term investment (SLLI). Using a sample of publicly listed Chinese firms spanning 2009–2024, this article employs a multiple linear regression model based on the climate uncertainty index at the urban level to analyze the impact of CPU on SLLI. The results show that CPU significantly increases firms’ tendency toward SLLI. Further mechanism analyses indicate that CPU primarily affects SLLI practices by shortening corporate debt maturity and tightening financing constraints. Notably, the impact of CPU is particularly pronounced for non-state-owned enterprises, high-polluting firms, firms operating in low-market-concentration industries, and larger firms but is insignificant for other firm types. This study provides valuable insights for firms and policymakers to develop strategies and support mechanisms to address the challenges posed by CPU.