Weather, Credit, and Economic Fluctuations: Evidence from China

Zhenzhu Chen, Li Li and Yao Tang

MPRA Paper from University Library of Munich, Germany

Abstract: We constructed an Actuary Climate Index to measure extreme weather risks in China. Analyzing macroeconomic data through a structural vector auto-regression model suggests that a negative weather shock leads to persistently low GDP and credit obtained by non-financial firms. In our regression analysis of a panel of firms listed in China, the negative effects of weather shocks on firm level loans were statistically and practically significant. Further analysis suggests that credit risk and expectations are two important impact channels. A high existing credit risk or low confidence among firm managers, amplifies the negative effects of extreme weather on loans.

Keywords: extreme weather shocks; credit risk; expectations; Chinese economy (search for similar items in EconPapers)
JEL-codes: E32 E44 G32 Q54 (search for similar items in EconPapers)
Date: 2023-02-16
New Economics Papers: this item is included in nep-cfn, nep-cna, nep-env, nep-fdg and nep-rmg
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/116472/1/MPRA_paper_116472.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/120480/1/MPRA_paper_116472.pdf revised version (application/pdf)

Related works:
Journal Article: Weather, credit, and economic fluctuations: Evidence from China (2024)
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:116472

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 ().