Bank expansion and corporate biodiversity risk exposure

A publication titled “Bank expansion and corporate biodiversity risk exposure: Evidence from China” on International Review of Financial Analysis by George Wu and co-authors in January 2026

Abstract

This study examines how bank geographic expansion affects corporate biodiversity risk exposure. Using data from Chinese A-share listed firms from 2006 to 2022, we find that bank expansion significantly increases biodiversity risk. This effect is mainly achieved through weakened bank monitoring, declining green credit allocation, and increased carbon emissions. Heterogeneity tests reveal that the impact is stronger in regions with better environmental quality, in firms with higher business operation uncertainty, and in firm within less-polluting industries. Our findings highlight unintended ecological costs of banking expansion and emphasize the need for coordinated financial and environmental policies.