Climate policy risk and corporate asset structure upgrading: The rise of asset-light operations
Abstract
Climate-policy agendas have accelerated in recent years, while periodic revisions in regulatory priorities have increased firms’ exposure to policy-driven uncertainty. This paper explores whether such exposure reshapes firms’ operating models toward asset-lightness. We compile firm-year observations for China’ s publicly listed A-share companies over 2009–2023 and construct a firm-level climate policy risk measure by combining a national climate policy uncertainty series with cross-firm differences in climate-related environmental ratings. The empirical evidence indicates that greater climate policy risk is associated with a higher degree of asset-light operations, and the pattern persists when we adopt alternative variable definitions, introduce lag structures, and implement endogeneity-oriented specifications. Mechanism tests suggest that policy risk affects asset-lightness through multiple, mutually reinforcing forces: it raises compliance- and transition-related spending pressure, worsens external financing conditions, and intensifies investors’scrutiny of firms’low-carbon transition capacity. We also find clear cross-sectional variation. The estimated effect is stronger for firms with greater risk tolerance, healthier balance sheets, and more concentrated supply-chain relationships, and it is amplified in provinces with more developed market institutions. Overall, the findings highlight asset-structure adjustment as a corporate response to climate-policy uncertainty and offer implications for improving regulatory predictability and expanding transition-finance support.
Fields of Study & Subjects
Sustainable Finance and Green Bonds
Corporate Social Responsibility Reporting
Market Dynamics and Volatility
Publication details
- Journal / source
- International Review of Economics & Finance
- Publisher
- Elsevier BV
- Volume
- 107
- Pages
- 105103–105103
- Publication date
- 12 March 2026
- Language
- EN