Shaken to action: Natural disaster experience and enterprises' sustainable decision-making

Xin Xu, Yonghao Xu and Feifei Zhu

Energy Economics, 2024, vol. 136, issue C

Abstract: This paper explores how early-life exposure to natural disasters, specifically earthquakes, induces environmental-friendly actions in China's manufacturing sector. We establish that early-life earthquake experiences lead to a reduction in enterprises' pollutant emissions, an effect that persists for up to a decade and gradually diminishing over time. Delving into the experimental economics and psychology literature, we identify key drivers of environmentally responsible behavior in firms, including long-term time preferences, prosocial behaviors, and risk-taking attitudes. The pollutant reduction effect is more prevalent in firms with stronger performance, those that are nonstate-owned, operate in heavy-polluting industries, and have endured severe earthquakes. Our research expands the understanding of climate risk, post-traumatic growth, and factors influencing corporate pollutant emissions, offering valuable insights into how individuals' preferences can be nurtured to support environmental protection efforts.

Keywords: Natural disaster; Pollution emission; Time preference; Prosocial behavior; Risk-takin (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:136:y:2024:i:c:s0140988324004365

DOI: 10.1016/j.eneco.2024.107728

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