Climate change and exchange rate variables: A potential storm of urban debt

IF 7.5 1区经济学 Q1 BUSINESS, FINANCE

International Review of Financial Analysis Pub Date : 2025-06-18 DOI:10.1016/j.irfa.2025.104422

Yan Wang, Lianjiao Hu

{"title":"Climate change and exchange rate variables: A potential storm of urban debt","authors":"Yan Wang, Lianjiao Hu","doi":"10.1016/j.irfa.2025.104422","DOIUrl":null,"url":null,"abstract":"<div><div>In the context of the global economic and environmental landscape, the dynamic changes in local government debt levels driven by climate and exchange rate factors have become the focus of attention of academics and policymakers. Based on panel data from China's prefecture-level cities from 2007 to 2023, this study delves into the intricate relationship between climate change shocks, exchange rate fluctuations, and local government debt levels. Research shows that climate change shocks play an important role in increasing local government debt levels, and that this impact varies across regions with different levels of economic openness. Through mechanism analysis, it is found that exchange rate fluctuations play a mediating role in the process of climate change shocks affecting debt accumulation, and this mediating effect varies greatly in different geographical regions. In addition, the moderating effect analysis shows that the elasticity of industrial structure has a significant moderating effect on the relationship between climate change shocks and local government debt levels, and there is a threshold effect on this impact. This study provides empirical evidence for understanding the complex interaction between environmental factors, financial market volatility and fiscal policy in local economic governance, which can help policymakers formulate region-specific strategies, manage climate-related financial risks, and optimize local government debt management, so as to achieve sustainable local economic development.</div></div>","PeriodicalId":48226,"journal":{"name":"International Review of Financial Analysis","volume":"105 ","pages":"Article 104422"},"PeriodicalIF":7.5000,"publicationDate":"2025-06-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"International Review of Financial Analysis","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S1057521925005095","RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}

引用次数: 0

Abstract

In the context of the global economic and environmental landscape, the dynamic changes in local government debt levels driven by climate and exchange rate factors have become the focus of attention of academics and policymakers. Based on panel data from China's prefecture-level cities from 2007 to 2023, this study delves into the intricate relationship between climate change shocks, exchange rate fluctuations, and local government debt levels. Research shows that climate change shocks play an important role in increasing local government debt levels, and that this impact varies across regions with different levels of economic openness. Through mechanism analysis, it is found that exchange rate fluctuations play a mediating role in the process of climate change shocks affecting debt accumulation, and this mediating effect varies greatly in different geographical regions. In addition, the moderating effect analysis shows that the elasticity of industrial structure has a significant moderating effect on the relationship between climate change shocks and local government debt levels, and there is a threshold effect on this impact. This study provides empirical evidence for understanding the complex interaction between environmental factors, financial market volatility and fiscal policy in local economic governance, which can help policymakers formulate region-specific strategies, manage climate-related financial risks, and optimize local government debt management, so as to achieve sustainable local economic development.

查看原文本刊更多论文

气候变化和汇率变量：潜在的城市债务风暴

在全球经济和环境格局的背景下，气候和汇率因素驱动的地方政府债务水平的动态变化已成为学术界和政策制定者关注的焦点。基于2007年至2023年中国地级市的面板数据，本研究深入研究了气候变化冲击、汇率波动和地方政府债务水平之间的复杂关系。研究表明，气候变化冲击对地方政府债务水平的增加具有重要作用，且这种影响在经济开放程度不同的地区有所不同。通过机制分析发现，汇率波动在气候变化冲击影响债务积累的过程中发挥中介作用，且这种中介作用在不同地理区域差异较大。此外，调节效应分析表明，产业结构弹性对气候变化冲击与地方政府债务水平的关系具有显著的调节作用，且这种影响存在阈值效应。本研究为理解环境因素、金融市场波动和财政政策在地方经济治理中的复杂相互作用提供了实证证据，有助于决策者制定有针对性的区域战略，管理与气候相关的金融风险，优化地方政府债务管理，从而实现地方经济的可持续发展。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

求助全文

约1分钟内获得全文求助全文

来源期刊

International Review of Financial Analysis BUSINESS, FINANCE-

CiteScore

10.30

自引率

9.80%

发文量

366

期刊介绍： The International Review of Financial Analysis (IRFA) is an impartial refereed journal designed to serve as a platform for high-quality financial research. It welcomes a diverse range of financial research topics and maintains an unbiased selection process. While not limited to U.S.-centric subjects, IRFA, as its title suggests, is open to valuable research contributions from around the world.