Extreme Climate Risks and Economic Recovery: Evidence from Chinese Provincial Panel Data

Xiaoyu Shi ()
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Xiaoyu Shi: The University of Hong Kong, School of Computing and Data Science

A chapter in Proceedings of the 2026 4th International Conference on Digital Economy and Management Science (CDEMS 2026), 2026, pp 296-305 from Springer

Abstract: Abstract This paper examines the impact of extreme climate risks on provincial economic performance in China using panel data for 31 provinces over the period 2004–2023. It employs a two-way fixed-effects model to estimate the relationship between the Climate Physical Risk Index (CPRI) and provincial GDP. The analysis further explores heterogeneity across four specific disaster types—low temperature, high temperature, rainfall, and drought—and tests whether climate risks exert persistent effects through lagged specifications. The results show that climate physical risk is negatively associated with provincial GDP, indicating that climate-related shocks can weaken regional economic performance. Among the disaggregated indicators, rainfall-related risk appears to be the main driver of this negative effect. By contrast, the lagged-effect results do not provide robust evidence of persistent long-term impacts. Overall, the findings suggest that the economic consequences of climate disasters in China are concentrated mainly in the short run, highlighting the importance of disaster response, regional fiscal support, and climate risk management for improving economic resilience.

Keywords: climate risk; economic recovery; provincial GDP; China (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6239-699-9_32

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DOI: 10.2991/978-94-6239-699-9_32

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