Thomas Bassetti, Lorenzo Dal Maso, Valentina Pieroni
{"title":"Firms’ borrowing costs and neighbors’ flood risk","authors":"Thomas Bassetti, Lorenzo Dal Maso, Valentina Pieroni","doi":"10.1007/s11187-024-00932-0","DOIUrl":null,"url":null,"abstract":"<p>This study examines whether Italian firms exposed to physical climate risks incur additional borrowing costs due to spatial spillovers. Using a sample of 419,040 firm-year observations from 2016 to 2019, we find a positive relationship between a firm’s cost of debt and its neighborhood’s average exposure to climate risk. According to our findings, the costs associated with neighborhood climate risk are as relevant as those associated with a firm’s direct risk, with small businesses being the only ones affected by spillover effects. These results may be explained by small enterprises’ lack of financial diversification, poor bargaining power, and strong reliance on credit from financial intermediaries.</p>","PeriodicalId":21803,"journal":{"name":"Small Business Economics","volume":"68 1","pages":""},"PeriodicalIF":6.5000,"publicationDate":"2024-05-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Small Business Economics","FirstCategoryId":"96","ListUrlMain":"https://doi.org/10.1007/s11187-024-00932-0","RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS","Score":null,"Total":0}
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Abstract
This study examines whether Italian firms exposed to physical climate risks incur additional borrowing costs due to spatial spillovers. Using a sample of 419,040 firm-year observations from 2016 to 2019, we find a positive relationship between a firm’s cost of debt and its neighborhood’s average exposure to climate risk. According to our findings, the costs associated with neighborhood climate risk are as relevant as those associated with a firm’s direct risk, with small businesses being the only ones affected by spillover effects. These results may be explained by small enterprises’ lack of financial diversification, poor bargaining power, and strong reliance on credit from financial intermediaries.
期刊介绍：
Small Business Economics: An Entrepreneurship Journal (SBEJ) publishes original, rigorous theoretical and empirical research addressing all aspects of entrepreneurship and small business economics, with a special emphasis on the economic and societal relevance of research findings for scholars, practitioners and policy makers.
SBEJ covers a broad scope of topics, ranging from the core themes of the entrepreneurial process and new venture creation to other topics like self-employment, family firms, small and medium-sized enterprises, innovative start-ups, and entrepreneurial finance. SBEJ welcomes scientific studies at different levels of analysis, including individuals (e.g. entrepreneurs'' characteristics and occupational choice), firms (e.g., firms’ life courses and performance, innovation, and global issues like digitization), macro level (e.g., institutions and public policies within local, regional, national and international contexts), as well as cross-level dynamics.
As a leading entrepreneurship journal, SBEJ welcomes cross-disciplinary research.
Officially cited as: Small Bus Econ
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