Climate Risk Disclosure and the Green Innovation Premium of Manufacturing Firms: Does More Disclosure Always Pay Off?

ABSTRACT With the accelerating progress of global climate governance, regulators and investors increasingly require firms to disclose climate‐related risks. For high‐carbon manufacturing firms, how such disclosure translate into a green innovation premium (GIP) through market mechanisms has become a key policy issue for achieving an effective low‐carbon transition. This study uses data from listed manufacturing firms in China's A‐share market to empirically examine the impact of climate risk disclosure on firms' GIP and its underlying mechanisms. The findings indicate that climate risk disclosure significantly enhances the GIP, with the effect primarily driven by transition risks. This positive influence is more pronounced for firms located in regions with low climate risk exposure, those with high information disclosure quality, and non‐specialized, refined, distinctive, and innovative firms. Mechanism analysis reveals that climate risk disclosure strengthens the GIP by promoting internal resource integration and enhancing external market attention. From the perspective of management practice, this study suggests that governments should promote the institutionalization of climate risk disclosure. High‐quality disclosure should be incorporated into the regulatory framework to guide resources toward manufacturing firms with strong green innovation potential. Meanwhile, firms should shift from compliance‐oriented disclosure to strategic disclosure by strengthening internal resource integration and enhanceing external market attention through multiple channels. These efforts will contribute to the sustainable development of the manufacturing sector and further enhance the green innovation premium.