Risk of climate change as a mediator of CEO's traits-firm value nexus: evidence from Chinese companies

Purpose This study aims to examine the direct and indirect relationship between the importance of CEO's Traits and firm value, using climate change risk as a mediating variable in the Chinese context. Design/methodology/approach To test the direct and indirect effects between the importance of CEO's Traits and firm value, this study uses a panel dataset of 699 Chinese firms between 2018 and 2024. Findings The regression results show that climate change risk mediates the relationship between the importance of CEO's Traits and firm value. Furthermore, the risk of climate change plays a partial mediating role in this relationship, presenting a significant negative effect. Practical implications These results have policy and practical implications that could help regulators improve transaction quality and ensure more effective market oversight. They recommend that governments implement regulations and restrictions on firm value based on the importance of CEO's Traits in the Chinese context. Originality/value While existing literature has examined the direct relationship between CEO's Traits and firm value, this work focuses on examining the direct and indirect association between these characteristics and firm value, via the mediating effect of climate change risk, an approach that has been relatively unexplored to date.