Biodiversity Risk and Corporate Default Probability

Biodiversity Risk and Corporate Default Probability | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Research Article Biodiversity Risk and Corporate Default Probability Hai Hong Trinh This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-7553627/v1 This work is licensed under a CC BY 4.0 License Status: Published Journal Publication published 24 Apr, 2026 Read the published version in Risk Management → Version 1 posted You are reading this latest preprint version Abstract The study examines the impact of biodiversity risk on default probability. The study shows that biodiversity risk increases the likelihood of default. The impacts are significant for firms with lower access to credit and cash reserves. Firms with leverage jumps for operating needs present a significantly increased 5-year-ahead default risk. As firms reserve sufficient liquidity, leverage jumps decrease default risk. Local risk climate factors moderate the impact of biodiversity on default risk. Treated firms that are prone to transitional and physical risk factors experience a significantly increased default probability. There is a bright side for firms with higher attention from management boards and analysts to climate change exposure. Local climate action maintains a firm’s growth prospects through the mitigated effects of biodiversity risk on default probability. The findings offer timely contributions to corporate biodiversity finance, which is crucial to future studies. JEL codes : G0, G3, G4 Biodiversity risk default probability climate change growth prospects financial decisions Full Text Additional Declarations No competing interests reported. Cite Share Download PDF Status: Published Journal Publication published 24 Apr, 2026 Read the published version in Risk Management → Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. Our growing team is made up of researchers and industry professionals working together to solve the most critical problems facing scientific publishing. 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