Does Historical Climate Influence Corporate Resilience to Crises?

Wenxuan Hou, Ruoran Zhao*

*Corresponding author for this work

Research output: Working paper

Abstract / Description of output

The persistence of climate-driven cooperation plays an important role for firms’ resilience to economic downturns. We hypothesize that the weather-induced social capital reduces financial obstacles for firms and enhances corporate resilience to crises. Our results based on high-resolution weather data show that pre-industrial weather uncertainty endowed firms with less financial obstacle, especially in areas with higher incentives to cooperate to insure against weather risks in history. Long-run weather risks have positive impacts on firms’ survival and recovery from crises of systemic banking crises and COVID-19 because that greater level of social capital enables more lending from banks and supply chains.
Original languageEnglish
PublisherSocial Science Research Network (SSRN)
Publication statusE-pub ahead of print - 5 Jan 2023

Keywords / Materials (for Non-textual outputs)

  • access to finance
  • corporate resilience
  • social capital
  • cooperation
  • weather risks


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