Climate Risk and Foreign Direct Investment Entry Mode
研究了气候风险如何影响跨国公司进入外国市场时选择绿地投资还是跨境并购，发现物理风险增加促使选择绿地投资，而转型风险则抑制绿地投资。
ABSTRACT The paper examines how climate risk impacts the strategic entry mode choices—between greenfield investments and cross‐border mergers and acquisitions (M&As)—of multinational enterprises (MNEs) into foreign markets. Our study adds to existing literature through a cross‐countries empirical analysis and uses a newly developed dataset, the Multinational Revenue, Employment, and Investment Database (MREID), that accounts for how both physical and transition risks of climate change affect MNEs' entry mode choice. Physical risk refers to the tangible impacts of climate change such as extreme weather events, while transition risk involves regulatory and policy changes associated with moving towards a low‐carbon economy. Using data for 139 source countries and 134 destination countries over the period from 2010 to 2021, we find that an increase in the physical risk of climate change leads to MNEs choosing greenfield investment when entering a new market while a higher level of transition risk discourages greenfield investment. Physical risk has a negative and significant influence on MNEs' entry choice of using cross‐border M&A. There is a positive and significant correlation between transition risk and cross‐border M&A though such a relationship is not robust. Industrial‐level evidence shows a similar pattern in the majority of the industries. Our findings provide policymakers with guidelines helping to mitigate the negative impact of climate change on business decisions at the global level.