Climate finance and the short-term debt long-term use of enterprises

The phenomenon of short-term debt long-term use is common among Chinese enterprises. Climate finance is changing the allocation of credit resources, leading to profound changes in corporate debt financing. How does climate finance affect the short-term debt long-term use of enterprises? Based on theoretical analysis and data from the climate finance index calculated for 2008–2022, as well as panel data from A-share listed companies in the Shanghai and Shenzhen stock markets, this paper employs a two-way fixed effects panel model to study the impact of climate finance on the short-term debt long-term use of Chinese enterprises. The results indicate that: First, climate finance exacerbates the extent of short-term debt long-term use; for every unit increase in the climate finance level of the city where a company is located, the degree of short-term debt long-term use increases by 1.3607 percentage points. Second, climate finance enhances the availability of bank loans, alleviating financing constraints for enterprises; it reduces the uncertainty of climate policies, prompting companies to increase the supply of commercial credit; both of these factors lead to an increase in short-term debt long-term use. This research provides a new perspective for managing the risks associated with short-term debt long-term use in enterprises and serves as a warning for the healthy development of climate finance.