In recent years, with the increasing attention paid to climate risks, the changes in climate policies are also more full of uncertainties, which have brought tremendous impact to economic entities, including companies. Using the dynamic threshold model, this study investigates the nonlinear and the asymmetric effect of climate policy uncertainty on Chinese firm investment decisions with panel data of 128 Chinese energy-related companies from 2007 to 2019. The empirical findings indicate that the influence of climate policy uncertainty on firm investment is significantly nonlinear. Overall, climate policy uncertainty is not apparently related to corporate investments in the high-level range, while it negatively affects the investments in the low-level range. In addition, to be more specific, the negative impact of climate policy uncertainty on the mining industry is tremendous, while the influence on the production and supply of electricity, heat, gas, and water sector is remarkably positive. The results of this study could help the company managers and policymakers to arrange appropriate related strategies under different climate policy conditions.

This study investigates some determinants of carbon intensity in 28 countries in the European Union (EU), including non-fossil energy, economic growth, energy consumption, and oil price. A panel quantile regression method, which considers both individual heterogeneity and distributional heterogeneity, is applied in this paper. The empirical results imply that the influences of these determinants on carbon intensity are heterogeneous and asymmetric across different quantiles. Specifically, non-fossil energy can significantly decrease carbon intensity, but shows a U-shaped relationship. Economic growth has a negative impact on carbon intensity, especially for medium-emission and high-emission countries. The effects of heating degree days on carbon intensity are positive, although the coefficients are not significant at low quantiles, they become significant from medium quantiles. Besides, we find an inverse U-shaped relationship between crude oil price and carbon intensity. Finally, several relevant policy recommendations are proposed based on the empirical results.

Financial systemic risk – defined as the risk of collapse of an entire financial system vis-à-vis any one individual financial institution – is making inroads into academic research in the aftermath of the late 2000s Global Financial Crisis. We shed light on this new concept by investigating the value of various systemic financial risk measures in the corporate failure predictions of listed nonfinancial firms. Our sample includes 225,813 firm-quarter observations covering 8,604 US firms from 2000 Q1 to 2016 Q4. We find that financial systemic risk is incrementally useful in forecasting corporate failure over and above the predictions of the traditional accounting-based and market-based factors. Our results are stronger when the firm in consideration has higher equity volatility relative to financial sector volatility, smaller size relative to the market, and more debts in current liabilities. The combined evidence suggests that systemic risk is a useful supplementary source of information in capital markets.

The file associated with this record is under a 36-month embargo from publication in accordance with the publisher's self-archiving policy. The full text may be available through the publisher links provided above.This paper proposes a Markov regime switching framework for modeling carbon emission (CO2) allowances that combines a regime switching behavior and disequilibrium adjustments in the mean process, along with a state-dependent dynamic volatility process. We find that all regime switching based hedging strategies significantly outperform single regime hedging strategies (both in-sample and out-of-sample), with the newly proposed framework providing the greatest variance reduction and the best hedging performance. Our results indicate that risk managers using state-dependent hedge ratios to manage portfolio risks in carbon emission markets will achieve superior hedging returns.Peer-reviewedPost-prin