TY - JOUR
T1 - Climate change and corporate financialization
T2 - International evidence
AU - Zhang, Yongji
AU - Zhang, Yankai
AU - Wang, Ke
N1 - Publisher Copyright:
© 2026 Elsevier B.V.
PY - 2026/3
Y1 - 2026/3
N2 - Climate change is a critical global challenge, intensifying risks and influencing corporate financial behavior. Employing a high-dimensional fixed-effects model on a panel dataset of 11,167 firms across 59 countries, the study finds that climate change acts as a significant catalyst for corporate financialization, compelling firms to increase their allocation of capital to financial assets. This effect, robust under various checks, operates via two mechanisms: climate change exacerbates financing constraints, prompting firms to accumulate liquid assets for precautionary motives, and it dampens the efficiency of real investments, driving a strategic reallocation of capital toward financial assets as a form of investment substitution. Heterogeneity is evident in relation to energy vulnerability, digitalization, industrial structure, carbon emission intensity, and Islamic countries. Furthermore, increased financialization leads to elevated dividend payouts. Adopting a global perspective, this study fills a critical gap, providing empirical evidence on firms’ strategic financial adaptation to climate change. It contributes to academic discourse and offers practical implications for policymakers and corporates.
AB - Climate change is a critical global challenge, intensifying risks and influencing corporate financial behavior. Employing a high-dimensional fixed-effects model on a panel dataset of 11,167 firms across 59 countries, the study finds that climate change acts as a significant catalyst for corporate financialization, compelling firms to increase their allocation of capital to financial assets. This effect, robust under various checks, operates via two mechanisms: climate change exacerbates financing constraints, prompting firms to accumulate liquid assets for precautionary motives, and it dampens the efficiency of real investments, driving a strategic reallocation of capital toward financial assets as a form of investment substitution. Heterogeneity is evident in relation to energy vulnerability, digitalization, industrial structure, carbon emission intensity, and Islamic countries. Furthermore, increased financialization leads to elevated dividend payouts. Adopting a global perspective, this study fills a critical gap, providing empirical evidence on firms’ strategic financial adaptation to climate change. It contributes to academic discourse and offers practical implications for policymakers and corporates.
KW - Climate change
KW - Corporate financialization
KW - Financing constraints
KW - International evidence
KW - Investment efficiency
UR - https://www.scopus.com/pages/publications/105029561951
U2 - 10.1016/j.eneco.2026.109149
DO - 10.1016/j.eneco.2026.109149
M3 - Article
AN - SCOPUS:105029561951
SN - 0140-9883
VL - 155
JO - Energy Economics
JF - Energy Economics
M1 - 109149
ER -