Climate Shocks and the Spatial Reconfiguration of Financial Risk: Evidence from China’s Urban Equity Network

Climate risk has become a major challenge for the development of sustainable finance and the enhancement of regional economic resilience. However, limited attention has been paid to how climate shock affects the spatial organization of financial dependence across cities. Using daily return data for firms listed on China’s A share market from 2021 to 2025, this study examines the relationship between climate shock and the urban equity risk network. Firm returns are first aggregated according to corporate location, after which annual networks and rolling backbone networks are constructed. The resulting network indicators are then matched with a national daily climate shock index. The empirical analysis combines comparisons across climate shock groups, regressions, alternative windows, lagged models, and descriptive analyses of extreme climate windows. The results show that urban equity risk in China is spatially uneven. Coastal urban regions and several major inland cities occupy influential positions in the network. Higher mean climate shock is significantly associated with greater average edge weight and average weighted degree, indicating stronger dominant risk connections across cities. The main findings remain stable in lagged models and specifications based on longer rolling windows, whereas acute extreme climate shocks are associated with more heterogeneous network responses. The findings suggest that sustainable financial governance should incorporate network monitoring across cities, regional regulatory coordination, and dynamic climate shock testing to strengthen the resilience of urban and regional financial systems to climate risk.