Climate Change Vulnerability and Cross-Border Bank Loans:Evidence from Syndicate Loans
The impact of climate change risks on global financial markets is becoming increasingly significant.Based on data from corporate cross-border syndicated loans,this paper examines the impact of the rising climate change vulnerability on the scale of corporate cross-border bank loans from a micro perspective.The study finds that an increase in a country's climate change vulnerability leads to a decrease in the scale of cross-border syndicated loans obtained by its corporations.The mechanism analysis reveals that the rising climate change vulnerability causes a decline in the liquidity levels of domestic borrowing firms and an increase in the probability of defaulting on their debts.This heightens the credit risk premium demanded by foreign lenders,thereby reducing the scale of cross-border syndicated loans obtained by corporations.The tightening of global dollar liquidity amplifies this effect.The heterogeneity analysis shows that,in response to climate change vulnerability,lenders tighten credit conditions and reduce the issuance of long-term,fixed-term loans.Firms under increased debt pressure and those in"climate change vulnerable industries"are strongly affected by climate change vulnerability.The main conclusions remain robust after considering the impact of major climate disasters.This paper provides micro-level evidence on the impact of climate change risks on cross-border bank lending activities and offers valuable insights for countries to better cope with climate change risks.
syndicated loanscross-border bank loansclimate change vulnerabilityclimate change risk
万方数据
维普
