Do coal price shocks affect the risk-taking of listed companies in China?

Abstract

Macroeconomic factors such as coal prices affect corporate decision making. With a set of 39,795 observations of firm-year data, encompassing 30 provinces and spanning the years 2005–2022, this paper estimates the impact of coal price shocks to corporate risk-taking of listed companies in China. The empirical results show that coal prices change negatively affect corporate risk-taking due to internal risk aversion. Further analysis shows that this effect is asymmetric between positive and negative shocks, and is more significant among higher coal dependence provinces. External factors such as economic policy uncertainty further reduce risk-taking. This study provides both macro and micro perspective analysis of corporate risk-taking and coal prices influences, contributing to the policy references for corporate strategic choices and coal price adjustments in the process of energy transition of China.