Temperature, Adaptation, and Local Industry Concentration

Jacopo Ponticelli, Qiping Xu and Stefan Zeume

No 31533, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We use plant-level data from the U.S. Census of Manufacturers to study the short- and long-run effects of temperature on manufacturing activity. We find that high-temperature shocks significantly increase energy costs and lower productivity for small plants, while large plants are mostly unaffected. Commuting zones with higher increases in average temperatures between the 1980s and the 2010s experience a decline in the number of small plants, reallocation of labor from small to large plants, and higher local labor market concentration. Differences in costs per unit of energy, managerial skills, and access to finance contribute to explaining our results.

JEL-codes: G3 L11 O14 Q54 (search for similar items in EconPapers)
Date: 2023-08
New Economics Papers: this item is included in nep-cfn, nep-ene, nep-env, nep-geo and nep-his
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