Beschreibung:
Prior studies have noted that firms with climate change exposure suffer from earnings and cash flow volatility and have difficulties raising capital. This study finds that such firms tend to invest more in working capital, mainly driven by increased investments in receivables (a conservative strategy to boost sales). Moreover, such firms also increasingly use supplier-provided payables (a strategy to improve the information environment and ease financing woes). Our results are more pronounced in firms in industries that are susceptible to climate change. Moreover, financially unconstrained firms and firms with above-median credit ratings tend to invest more in working capital