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Could Weather Fluctuations Affect Local Economic Growth? Evidence from Counties in the People's Republic of China

Chengzheng Li (), Jiajia Cong () and Haiying Gu ()
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Chengzheng Li: Institute for Economics and Social Research, Jinan University, Guangzhou, People's Republic of China (PRC). E-mail:
Jiajia Cong: School of Management, Fudan University, Shanghai, PRC. E-mail:
Haiying Gu: Antai College of Economics and Management, Shanghai Jiao Tong University, Shanghai, PRC. E-mail:

Asian Development Review, 2020, vol. 37, issue 2, 201-224

Abstract: This paper uses historical fluctuations of weather variables within counties in the People's Republic of China to identify their effects on economic growth from 1996 to 2012. We find three primary results. First, higher temperatures significantly reduce the growth rate of county-level gross domestic product per capita: an increase in the annual average temperature of 1°C lowers the growth rate by 1.05%–1.25%. The effect of higher temperatures is nonlinear. Second, fluctuations in temperature and precipitation not only have a level effect, they also have a substantial cumulative effect. Third, weather fluctuations have wide-ranging effects. Beyond their substantial effects on the growth rate of agricultural output, they also affect nonagriculture sectors, labor productivity, and investment. Our findings provide new evidence for the impact of weather changes on economic development and have major implications for adaptation policies.

Keywords: climate change; economic growth; precipitation; temperature; weather shocks (search for similar items in EconPapers)
JEL-codes: O13 O44 Q54 Q56 (search for similar items in EconPapers)
Date: 2020
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