Regional carbon efficiency and corporate risk-taking

Based on Chinese city data and a sample of A-share listed companies from 2008–2019, we empirically confirm that improving regional carbon efficiency is conducive to enhancing corporate risk-taking. The mechanism tests show that improving regional carbon efficiency can increase corporate risk-taking by reducing corporate carbon risk. Reducing carbon risk leads to an increase in debt financing, a reduction in agency costs between shareholders and managers, and an incentive for R&D investments.