Environmental uncertainty and corporate bankruptcy risk: insights from China

Mali, D, Nguyen, TH ORCID: https://orcid.org/0000-0001-7170-5882 and Zhao, X, 2026. Environmental uncertainty and corporate bankruptcy risk: insights from China. Research in International Business and Finance, 86: 103366. ISSN 0275-5319

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Abstract

As the world is facing various uncertainties and conflicts, this study aims to explore the impact of environmental uncertainty on corporate bankruptcy risk. We also investigate whether this relationship is impacted by regional differences in China, differences in ESG performance, and the gender diversity of the board. Using an extensive sample of listed Chinese firms from 2010 to 2022, we find that the risk of corporate bankruptcy is higher in the presence of higher environmental uncertainty. In terms of regional differences, compared to the Western region of China, the corporate bankruptcy risk of firms in the Central and Eastern regions is lower, under the influence of environmental uncertainty. Interestingly, given the gender diversity of the executive board, our results show that female directors' participation does not reduce a firm's bankruptcy risk in the presence of environmental uncertainty. However, a higher environment, social and governance (ESG) score mitigates bankruptcy risk to a greater extent for firms above the median ESG level. Findings from this study have significant contributions and implications for the academic literature. In particular, the study expands on existing debates on environmental uncertainty and fills a research gap in bankruptcy risk. Moreover, by providing evidence that the region in which a firm is headquartered influences risk, the study contributes to practice and offers important insights for management/policymakers.

Item Type:	Journal article
Publication Title:	Research in International Business and Finance
Creators:	Mali, D., Nguyen, T.H. and Zhao, X.
Publisher:	Elsevier
Date:	June 2026
Volume:	86
ISSN:	0275-5319
Identifiers:	Number Type 10.1016/j.ribaf.2026.103366 DOI 2591776 Other
Rights:	© 2026 the author(s). Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license.
Divisions:	Schools > Nottingham Business School
Record created by:	Jonathan Gallacher
Date Added:	17 Mar 2026 16:18
Last Modified:	17 Mar 2026 16:18
URI:	https://irep.ntu.ac.uk/id/eprint/55434

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