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Climate change and the financial performance of basic materials companies: empirical evidence in Vietnam

Author

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  • My-Linh Thi Nguyen
  • Tuan Huu Nguyen

Abstract

Purpose - This study examines the evidence of the impact of climate change on the financial performance of basic materials companies in Vietnam. Design/methodology/approach - The research sample includes eighty-two basic materials companies listed on the Vietnamese stock market from 2003 to 2022. This study used one-way and two-way fixed-effects feasible generalized least squares (FGLS) estimation methods. Findings - Climate change, measured through variables including changes in temperature, average rainfall, greenhouse gas emissions and rising sea levels, has a negative impact on the financial performance of companies in this industry. The study also found that, with rising temperatures, the financial performance of steel manufacturing companies decreased less than that of coal mining and forestry companies, but increasing greenhouse gases and rising sea levels reduced the financial performance of steel companies. We did not find evidence of any difference in the impact of climate change on the financial performance of basic materials companies before and after the UN Climate Change Conference (COP 21). This is a new finding, which is consistent with empirical studies in Vietnam and different from previous studies in that it provides new evidence on the impact of climate change on the financial performance of basic materials companies in the Vietnamese market and cross-checks the impact of climate change by sector and over time. Originality/value - To the best of our knowledge, this is one of the first articles on climate change and the financial performance of basic materials companies.

Suggested Citation

  • My-Linh Thi Nguyen & Tuan Huu Nguyen, 2024. "Climate change and the financial performance of basic materials companies: empirical evidence in Vietnam," Journal of Advances in Management Research, Emerald Group Publishing Limited, vol. 21(4), pages 509-529, April.
  • Handle: RePEc:eme:jamrpp:jamr-11-2023-0337
    DOI: 10.1108/JAMR-11-2023-0337
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    More about this item

    Keywords

    Financial performance; Climate change; Mineral; Basic materials; Environmental impact; G32; Q54; Q58;
    All these keywords.

    JEL classification:

    • 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
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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