National Culture and Climate Change Exposure

This study investigates the impact of national culture on climate change exposure, focusing on two cultural dimensions: individualism and long-term orientation (LTO). Drawing on institutional theory and a global sample of firms from 2002 to 2022, the study finds that firms in highly individualistic societies exhibit significantly lower climate change exposure. Conversely, firms embedded in long-term-oriented cultures demonstrate higher climate change exposure. Moderating analyses further reveal that institutional environments condition cultural effects: both the negative influence of individualism and the positive influence of LTO are amplified in countries with carbon pricing mechanisms and stronger environmental policies. In contrast, the positive effect of LTO is attenuated in firms with more independent boards, suggesting governance structures can substitute for cultural predispositions. Overall, the findings underscore the importance of integrating national culture into the analysis of firms’ climate change exposure, highlighting its interaction with institutional and organizational contexts in shaping corporate responses to climate risks.