Entry, exit and market structure in a changing climate

Michele Cascarano, Filippo Natoli and Andrea Petrella ()

MPRA Paper from University Library of Munich, Germany

Abstract: Climate change has long run effects on the size and composition of a country's corporate sector. Using administrative data on the universe of Italian firms, we find that an increase in the incidence of very hot days over a multiyear period persistently reduces the growth rate of active firms in the market. This is due to a drop in firm entry and an increase in firm exit, with relocation playing a minor role. A firm-level investigation reveals a dichotomy between smaller firms, which suffer from high temperatures, and larger firms that successfully adapt, increasing production and net revenues. According to an average climatic scenario, the projected evolution of local temperatures will impact corporate demography further, also exacerbating the divergent effects across warmer and colder areas over the current decade.

Keywords: climate change; temperatures; firm dynamics (search for similar items in EconPapers)
JEL-codes: D22 Q54 R12 (search for similar items in EconPapers)
Date: 2022-04-26
New Economics Papers: this item is included in nep-bec, nep-com, nep-ent, nep-env, nep-sbm and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/112868/1/MPRA_paper_112868.pdf original version (application/pdf)

Related works:
Working Paper: Entry, exit, and market structure in a changing climate (2023)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:112868

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().