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ORIGINAL RESEARCH article

Front. Environ. Sci.
Sec. Environmental Economics and Management
Volume 13 - 2025 | doi: 10.3389/fenvs.2025.1537570
This article is part of the Research Topic Climate Risk and Green and Low-Carbon Transformation: Economic Impact and Policy Response View all 12 articles

Carbon risk and corporate bankruptcy pressure: Evidence from a quasi-natural experiment based on the Paris Agreement

Provisionally accepted
Jingxing Liu Jingxing Liu 1Zihang Liao Zihang Liao 1Tianqi Liu Tianqi Liu 2*Yuan Geng Yuan Geng 1,3
  • 1 Huaqiao University, Quanzhou, Fujian, China
  • 2 Xiamen National Accounting Institute, Xiamen, China
  • 3 Central South University, Changsha, Hunan Province, China

The final, formatted version of the article will be published soon.

    Green and low-carbon development transformation of enterprises is of great significance to climate governance and sustainable economic development. It is a realistic problem worth to study whether carbon risk will affect the bankruptcy pressure of corporates. This paper empirically analyzes the impact of carbon risk shocks on the corporates bankruptcy pressure based on the quasi-natural experiment of the implementation of the Paris Agreement. The results indicated that carbon risk significantly alleviated corporates bankruptcy pressure. Specifically, mechanistic analysis uncovered that the increase in carbon risk may reduce the bankruptcy pressure of corporates was mediated by lowering corporate financing costs and elevating green innovation levels. Finally, it was found through the heterogeneity analysis that the negative correlation between carbon risk and bankruptcy pressure was more pronounced for non-state-owned enterprises, small-scale corporations, and companies located in highly competitive industries.

    Keywords: Paris climate agreement, Carbon risk, Bankruptcy pressure, Financial constraints, green innovation

    Received: 02 Dec 2024; Accepted: 07 Jan 2025.

    Copyright: © 2025 Liu, Liao, Liu and Geng. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.

    * Correspondence: Tianqi Liu, Xiamen National Accounting Institute, Xiamen, China

    Disclaimer: All claims expressed in this article are solely those of the authors and do not necessarily represent those of their affiliated organizations, or those of the publisher, the editors and the reviewers. Any product that may be evaluated in this article or claim that may be made by its manufacturer is not guaranteed or endorsed by the publisher.