This research exploits Australia's ratification of the Kyoto Protocol, which mandates the country to reduce carbon emissions, thereby exposing Australian firms to increased carbon risk, as a quasi-natural experiment to examine the causal effect of carbon risk on firm capital structure. We find...

This paper shows that firm credit constraints impair climate policy. Empirically, firms with tighter credit constraints, measured by their distanceto-default, exhibit a relatively smaller emission reduction after a carbon tax increase. We incorporate this channel into a quantitative DSGE model...

Purpose - There has been an increase in research examining whether and how companies disclose climate change impacts and how these disclosures influence capital structure strategies in recent years. However, prior literature has generally focused on developed countries. This paper proposes to...