Associate Professor Xiaohang Ren, a researcher of the base, has published a collaborative paper titled "Carbon risk and debt financing: An international perspective"  in Journal of International Money and Finance.

Journal of International Money and Finance has consistently focused on research in the interdisciplinary field of international monetary economics and international finance. In the 2024 SJR indicators, the journal ranks in Q1 of Economics and Finance.

Abstract: Threatening escalation of carbon emissions has elicited increasing attention to the significance of carbon risk in shaping a firm’s debt financing decision. Despite the policy significance, the relationship between carbon risk and debt financing remains to be resolved. This paper provides a firm-level investigation to seek insights into the impact of carbon risk on debt financing. Employing an international dataset covering 24 economies, our results suggest that rising carbon risk leads to debt expansion, validating the liquidity shortage view that carbon risk enlarges firm’s liquidity concerns to resort to debt financing. The debt expansion effect of carbon risk is found to be more pronounced in countries with high uncertainty and low socio-economic development, industries with high competition, firms with non-high-tech attributes, low financial constraints, limited growth opportunities, and leverage ratios below the optimal level. Further analysis supports the Porter hypothesis by showing that carbon risk and its resultant debt expansion can enhance corporate performance in a time-lagged pattern.

Keywords: Carbon risk；Debt financing；Liquidity shortage；Porter hypothesis

Link: Carbon risk and debt financing: An international perspective - ScienceDirect

Teacher profile

Xiaohang Ren is a Distinguished Associate Professor at the Business School, Central South University, an Elsevier China Highly Cited Researcher, and a Top 2% Scientist Worldwide. He mainly engages in research on energy finance, financial risk, and financial econometrics. He has published more than 100 papers in authoritative journals at home and abroad,including Journal of the American Statistical Association,Transportation Research Part A, Energy Economics, Quantitative Finance, Review of Quantitative Finance and Accounting, International Review of Financial Analysis, Technological Forecasting and Social Change, Business Strategy and the Environment, Pacific-Basin Finance Journal, Applied Energy, Resources Policy, Renewable & Sustainable Energy Reviews, Energy, Journal of Management Sciences in China (English Edition), Systems Engineering — Theory and Practice, and Chinese Journal of Management Science. Among these, more than 30 are ESI Hot Papers/Highly Cited Papers. He serves as Section Editor of Sustainable Communities (Taylor & Francis), Associate Editor of journals such as Humanities & Social Sciences Communications (the only humanities and social sciences journal under Nature), and Guest Editor of several SSCI journals including Climate Change Economics and Economic Change and Restructuring.