Climate effects on the diversification strategy of export firms: Evidence from China.
Using a multi-product trade model, this study investigates the impact of temperature on firms' diversification in the export market. Using export and meteorological data of Chinese firms from 2000 to 2016, the empirical results confirm an inverted U-shaped relationship, implying that extreme te...
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| Format: | Article |
| Language: | English |
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Public Library of Science (PLoS)
2024-01-01
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| Series: | PLoS ONE |
| Online Access: | https://doi.org/10.1371/journal.pone.0308391 |
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| _version_ | 1832582968114151424 |
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| author | Junmei Zhang Lianying Yao |
| author_facet | Junmei Zhang Lianying Yao |
| author_sort | Junmei Zhang |
| collection | DOAJ |
| description | Using a multi-product trade model, this study investigates the impact of temperature on firms' diversification in the export market. Using export and meteorological data of Chinese firms from 2000 to 2016, the empirical results confirm an inverted U-shaped relationship, implying that extreme temperatures significantly reduce firms' export product diversification. The analysis shows that extreme temperatures primarily reduce the variety of both new and existing products, with a less robust effect on product exit strategies. General trade firms are more adaptable to extreme temperatures than processing trade firms, and are likely to maintain diversified strategies. Stronger regional financial markets and higher energy consumption increase the adaptability of local firms to extreme temperatures. Firms have not yet adapted to local climatic norms. Furthermore, extreme temperatures also partly inhibit diversification of export destinations and relationships. The results of the study show that as climate change intensifies, leading to more frequent extreme temperatures, firms will face significant hurdles in pursuing diversified development strategies, pointing to increasing challenges ahead. |
| format | Article |
| id | doaj-art-a9832027b68c4cacadf06cc46f0f5bcd |
| institution | Kabale University |
| issn | 1932-6203 |
| language | English |
| publishDate | 2024-01-01 |
| publisher | Public Library of Science (PLoS) |
| record_format | Article |
| series | PLoS ONE |
| spelling | doaj-art-a9832027b68c4cacadf06cc46f0f5bcd2025-01-29T05:30:47ZengPublic Library of Science (PLoS)PLoS ONE1932-62032024-01-01198e030839110.1371/journal.pone.0308391Climate effects on the diversification strategy of export firms: Evidence from China.Junmei ZhangLianying YaoUsing a multi-product trade model, this study investigates the impact of temperature on firms' diversification in the export market. Using export and meteorological data of Chinese firms from 2000 to 2016, the empirical results confirm an inverted U-shaped relationship, implying that extreme temperatures significantly reduce firms' export product diversification. The analysis shows that extreme temperatures primarily reduce the variety of both new and existing products, with a less robust effect on product exit strategies. General trade firms are more adaptable to extreme temperatures than processing trade firms, and are likely to maintain diversified strategies. Stronger regional financial markets and higher energy consumption increase the adaptability of local firms to extreme temperatures. Firms have not yet adapted to local climatic norms. Furthermore, extreme temperatures also partly inhibit diversification of export destinations and relationships. The results of the study show that as climate change intensifies, leading to more frequent extreme temperatures, firms will face significant hurdles in pursuing diversified development strategies, pointing to increasing challenges ahead.https://doi.org/10.1371/journal.pone.0308391 |
| spellingShingle | Junmei Zhang Lianying Yao Climate effects on the diversification strategy of export firms: Evidence from China. PLoS ONE |
| title | Climate effects on the diversification strategy of export firms: Evidence from China. |
| title_full | Climate effects on the diversification strategy of export firms: Evidence from China. |
| title_fullStr | Climate effects on the diversification strategy of export firms: Evidence from China. |
| title_full_unstemmed | Climate effects on the diversification strategy of export firms: Evidence from China. |
| title_short | Climate effects on the diversification strategy of export firms: Evidence from China. |
| title_sort | climate effects on the diversification strategy of export firms evidence from china |
| url | https://doi.org/10.1371/journal.pone.0308391 |
| work_keys_str_mv | AT junmeizhang climateeffectsonthediversificationstrategyofexportfirmsevidencefromchina AT lianyingyao climateeffectsonthediversificationstrategyofexportfirmsevidencefromchina |