Beyond Climate Change Risk: Biodiversity and Corporate Cash Holdings
2024, Economics Letters, 236, pp.111608
Résumé
We document that firms’ exposure to biodiversity risk is positively associated with corporate cash holdings. The positive effect is distinct from the influence of firm's exposure to climate change risk. Further, our findings are more pronounced for firms in industries highly exposed to biodiversity risks, facing large financial constraints or exposed to high competition. Overall, the results support the precautionary motives of corporate cash holdings.