Climate change exposure and corporate strategic aggressiveness: Evidence from Chinese listed companies

Economic Analysis and Policy. 2025. Vol. 88. P. 26–53.

Zhao F., Wang J., Chen Q.

This paper examines the strategic implications of corporate climate change exposure in the context of Chinese listed firms. Drawing on MD&A textual disclosures from 2007 to 2021, we construct a firm-level index of climate exposure and find that greater engagement with climate issues leads to more aggressive strategic behavior. This relationship is robust to a range of identification strategies and alternative specifications. Mechanism analysis reveals that climate exposure reduces financing constraints and stimulates risk-taking, prompting firms to act more decisively. The effect is more pronounced among non-state-owned enterprises, ESG-leading firms, those embedded in Confucian cultural regions, firms led by optimistic managers and more climate sensitive firms. We further find that opportunity-related climate signals—rather than physical risks or regulatory pressure—are the primary drivers of strategic change, and that these changes translate into tangible actions, such as increased green innovation and investment intensity. These findings highlight the economic relevance of climate-related information and underscore its role in shaping long-term corporate behavior and resource allocation in emerging markets.

Keywords: изменение климата, стратегические изменения, финансовые ограничения, financing constraints, Risk-taking, Climate change, Strategic change, Chinese listed companies, Принятие рисков, Китайские публичные компании

Publication based on the results of: Institutions, human capital and regional Development: historical analysis and contemporary challenges (2025)