How does the climate risk affect the firm growth: Evidence from China.

ABSTRACT: Corporate development is threatened by climate risk, which challenges business operations and long-term planning at an unprecedented scale and frequency. Based on the challenge-threat theory framework, this study uses data from Chinese A-share listed companies from 2008 to 2022 to systematically explore the effect of climate risk on firm growth and its transmission mechanisms. The findings indicate that (1) climate risk exhibits an inverted U-shaped non-linear relationship with firm growth. Moderate climate risk promotes firm growth by stimulating adaptive strategies (e.g., technological upgrades and financing expansion), but once the threshold is exceeded, resource constraints intensify, leading to a significant decline in growth potential. (2) Climate risk influences internal control qua

SUBMITTER: Zhang Y 

PROVIDER: S-EPMC12935275 | biostudies-literature | 2026

REPOSITORIES: biostudies-literature