Publication Type
Working Paper
Version
publishedVersion
Publication Date
5-2020
Abstract
This paper examines firms’ adaptation to long-term changes in climatic conditions. Using detailed information of establishments owned by U.S. public firms from 1990 to 2012, we show that higher abnormal temperatures over the previous five years in a county lead to a significant reduction in local employment and the number of establishments. Further tests suggest that the decline in employment and establishments is largely due to a decline in local consumer demand rather than lower labor productivity. We also find that firms more likely take adaptive actions when their managers are more likely to believe in, or are concerned about, climate change. Overall, we provide large-sample evidence on firm adaptation to climate change.
Keywords
Climate change, employment, economic establishments, adaptation, abnormal temperatures
Discipline
Corporate Finance | Finance and Financial Management
Research Areas
Finance
First Page
1
Last Page
42
Publisher
SSRN
Citation
LI, Frank Weikai; LIN, Yupeng; JIN, Zuben; and ZHANG, Zilong.
Do firms adapt to climate change? Evidence from establishment-level data. (2020). 1-42.
Available at: https://ink.library.smu.edu.sg/lkcsb_research/6560
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.