Analysis shows climate risk increases risk-taking in rural financial institutions, suggesting significant regional variations in China.
The research identifies the impact of climate risk on the risk‐taking of rural financial institutions in China and its mechanism, using 279 rural financial institutions from 2011 to 2021 as the research sample. Results show that climate risk significantly increases the risk‐taking of rural financial institutions, and agricultural economic development plays a mediating effect in the impact of climate risk on the risk‐taking of rural financial institutions. The impact of climate risk on the risk‐taking of rural financial institutions in China is more pronounced among financial institutions that have higher climate policy uncertainty and larger government environmental expenditures. Finally, the impact of climate risk on the risk‐taking of rural financial institutions in northern China is greater than that in southern China.
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Zhang et al. (2025) studied this question.