Urban Climate Adaptation and Firm Performance Under Climate Stress: Evidence from China’s Climate-Resilient City Pilot

This study explores whether urban climate adaptation changes firms’ operating responses to climate hazards. Using data for Chinese A-share listed firms from 2011 to 2023, we assess the 2017 Climate-Resilient City (CRC) pilot through a triple-difference approach. The analysis covers extreme heat, extreme low temperature, extreme rainfall, and meteorological dryness, with operating profit, operating cash flow, and labor productivity as outcomes. Heat exposure is negatively associated with all three outcomes, while benchmark estimates provide limited evidence of general performance gains following CRC adoption. The clearest CRC-related association is a more favorable heat–labor productivity relationship. An accounting decomposition shows a larger contribution from relative employment contraction than from the revenue component, which is positive but not statistically significant. Rainfall-related responses vary with prior local experience, while evidence for other hazard–outcome combinations is weaker. The heat-related finding remains broadly robust across alternative specifications, although the baseline interaction is not statistically significant after adjustment for multiple testing. The findings connect firms’ climate responses to their urban setting and distinguish changes in climate sensitivity from general performance gains. They also highlight the importance of considering revenue per worker alongside business activity and employment when evaluating urban adaptation.