Heterogeneous effects of weather shocks on firm economic performance

Tarsia, Romano (2024) Heterogeneous effects of weather shocks on firm economic performance. Geography and Environment Discussion Paper Series (45). Department of Geography and Environment, The London School of Economics and Political Science, London, UK.

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Abstract

This paper provides novel, firm-level estimates of the economic damages induced by temperature shocks. Leveraging European firm-level data, this study investigates the heterogeneity of damages across firms characteristics overlooked in aggregate analyses. The analysis consistently highlights negative (positive) impacts on the least (most) productive firms, contributing to both climate economics and the literature on aggregate productivity. Industry-specific effects indicate different susceptibilities across sectors to weather shocks. These results delve into the findings from the pooled sample which reveal a moderate U-shaped relationship between temperature and economic outcomes, suggesting significant adaptation for firms located in warmer areas. Temperature impacts on economic performance manifest with a lag, and varying persistence across firms. Methodologically, this work employs quantitative methods to address the potential drawbacks highlighted in the current climate econometrics discussion.

Item Type:	Monograph (Discussion Paper)
Official URL:	https://www.lse.ac.uk/geography-and-environment/re...
Additional Information:	© 2024 The Author
Divisions:	Geography & Environment
Subjects:	H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HC Economic History and Conditions G Geography. Anthropology. Recreation > GE Environmental Sciences
JEL classification:	D - Microeconomics > D2 - Production and Organizations > D24 - Production; Cost; Capital and Total Factor Productivity; Capacity O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O13 - Agriculture; Natural Resources; Energy; Environment; Other Primary Products O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O14 - Industrialization; Manufacturing and Service Industries; Choice of Technology O - Economic Development, Technological Change, and Growth > O5 - Economywide Country Studies > O52 - Europe Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q5 - Environmental Economics > Q51 - Valuation of Environmental Effects Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q5 - Environmental Economics > Q54 - Climate; Natural Disasters R - Urban, Rural, and Regional Economics > R1 - General Regional Economics > R11 - Regional Economic Activity: Growth, Development, and Changes
Date Deposited:	15 Jul 2024 10:18
Last Modified:	15 Oct 2024 10:09
URI:	http://eprints.lse.ac.uk/id/eprint/124251

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