The Impact of Climate Change on the Risk of Bankruptcy of Agricultural Companies in Poland: Regional Characteristics

Sylwester Kozak () and Agata Wierzbowska
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Sylwester Kozak: Institute of Economics and Finance, Warsaw University of Life Sciences, 02-787 Warsaw, Poland
Agata Wierzbowska: Graduate School of Economics, Kobe University, Kobe 657-8501, Japan

Sustainability, 2025, vol. 17, issue 22, 1-34

Abstract: Climate change observed in recent decades has, in most cases, negatively impacted on the operations of non-financial and agricultural enterprises. Filling a gap in the economic literature, this article presents the results of a study on the impact of rising temperature on the resilience to bankruptcy risk of over four thousand agricultural enterprises operating in Poland between 2016 and 2023, taking into account temperature and macroeconomic conditions of regions of their operation and assessing resilience with Altman (Z-score) and Zmijewski (X-score) methods. Using panel regression, it was demonstrated that temperature changes have a significant nonlinear (parabolic) effect on enterprise resilience. An increase in annual average temperatures above the long-term average weakens enterprise resilience. A generally similar, although individually variable relationship occurs for changes in average temperatures in spring, autumn, and winter. In the summer, this relationship is ambiguous. Furthermore, the resilience to bankruptcy risk improves growth in regional GDP and agricultural production, as well as enterprise’s assets, profitability and the share of equity in the financing structure. The conclusions can be used by agricultural enterprises in preparing contingency plans in the event of potential temperature shocks, and public administration for developing programs to protect agriculture against temperature shocks and food security plans.

Keywords: climate change; temperature shocks; bankruptcy risk; agricultural enterprises (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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