Finance Research Seminar – Yudian Chen

Title: Ecologically Innovative Practices and Financial Stability: A Banking Perspective

Date: 5 March 2025

Time: 14:00 – 15:00

Venue: FDC.1.17

If you would like to attend, please register using the following link:

Ecologically Innovative Practices and Financial Stability: A Banking Perspective

Speaker:  Yudian Chen (PhD Student, Newcastle University)

Yudian Chen, a PhD student under the supervision of Dr Trinh Vu and Professor Bartosz Gebka. The student will be presenting ahead of a conference presentation to collate comments from our colleagues and getting prepared for the conference.

Abstract:

This study investigates the impact of eco-innovation activities by banks on their performance and risk-taking behavior. Using data from 615 commercial banks across 48 countries (2002–2021), the findings reveal that while banks with higher eco-innovation initially experience lower accounting-based performance, they gain positive market valuations. The study also highlights that eco-innovation increases credit risk but reduces leverage risk. Additionally, it explores the moderating roles of analyst coverage and climate governance, showing that both enhance the positive effects of eco-innovation on market-based performance and leverage risk while mitigating its negative impact on credit risk. These findings emphasize the need for effective risk management strategies in eco-innovation adoption, urging bank managers to balance short-term costs with long-term benefits in climate risk mitigation strategies.