Climate risk and deployment of corporate resources to working capital

Muhammad Farooq Ahmad, Nihat Aktas*, Ettore Croci

*Corresponding author

Research output: Contribution to journalArticlepeer-review


Using a large sample of US listed firms, we find that exposure to climate risk is negatively associated with working capital. This effect is accentuated in carbon-intensive industries and firms facing financial difficulties. These findings suggest that climate risk pressures firms to release unnecessary resources allocated to working capital, a result consistent with the disciplinary channel. (c) 2023 Elsevier B.V. All rights reserved.
Original languageEnglish
Pages (from-to)N/A-N/A
JournalEconomics Letters
Publication statusPublished - 2023


  • Carbon intensity
  • Climate risk
  • Financial difficulty
  • Working capital


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