Amini, S. orcid.org/0000-0003-2719-8267, Johan, S., Kashefi-Pour, E. et al. (1 more author) (2025) Climate change risk, investor sentiment, and the performance of new entrant firms. Small Business Economics. ISSN: 0921-898X
Abstract
We explore how climate change risk affects the performance of new entrant firms seeking external capital by using a sample of Initial Public Offerings (IPO) from 2000 to 2020. We find climate change risk negatively affects underpricing and the long-term performance of the IPO firms. We further investigate the moderating effect of investor sentiment on the relationship between climate change risk and IPO long-term performance. We find that the negative effect of climate change risk on IPO performance is stronger for firms going public when investors are pessimistic. Exploring the channels through which climate change risk affects IPO performance, the results show that the effect of climate change risk on IPO underpricing is channeled through the IPO volume, while long-term underperformance is channeled through growth opportunities. Overall, our results are robust to various model specifications, firm-level measures of climate change risk, CEO traits, endogeneity concerns, and exogenous shocks.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | This is an author produced version of an article published in Small Business Economics made available under the terms of the Creative Commons Attribution License (CC-BY), which permits unrestricted use, distribution and reproduction in any medium, provided the original work is properly cited. |
Keywords: | Initial public offering, Climate risk, Investor sentiment |
Dates: |
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Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Business (Leeds) > Accounting & Finance Division (LUBS) (Leeds) |
Depositing User: | Symplectic Publications |
Date Deposited: | 11 Jun 2025 13:44 |
Last Modified: | 05 Aug 2025 10:52 |
Status: | Published online |
Publisher: | Springer Nature |
Identification Number: | 10.1007/s11187-025-01067-6 |
Sustainable Development Goals: | |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:227679 |