Climate Risk and Corporate Value: Evidence from Temperature Bins and Panel Regression

Bo Wu

Papers from arXiv.org

Abstract: In empirical research, this article uses daily climate data provided by the National Oceanic and Atmospheric Administration (NOAA) of the United States to construct a temperature box with a range of 5\( ^\circ\text{C} \), focusing on analyzing the impact of extreme high temperatures (\( >30^\circ\text{C} \)) and extreme low temperatures (\( \le -10^\circ\text{C} \)) on the asset value of enterprises. The results based on a panel regression model show that extreme high and low temperatures can significantly reduce the asset value of enterprises. In the robustness test, this article used lagged climate data for testing, and the results still showed that extreme high temperatures had a significant negative impact on the asset value of enterprises, verifying the reliability of the benchmark regression results. In-depth heterogeneity analysis shows that in the process of addressing climate risks, companies exhibit significant differentiation based on different ownership types and industry characteristics. According to research, state-owned enterprises are relatively less affected by extreme weather due to their resource advantages and policy preferences. In addition, foreign-funded enterprises demonstrate a high level of risk resistance due to their strong management efficiency and supply chain control capabilities. In the manufacturing sector, heavy industries such as steel and communication manufacturing are particularly affected by the negative effects of extreme weather, which fully demonstrates that these industries face more severe challenges when dealing with extreme weather conditions.

Date: 2025-03
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