Signaling Corporate Resilience Under Extreme Weather Shocks: Strategy, Visibility, and Market Responses

ABSTRACT Extreme weather provides a negative public signal about firms' operating conditions, while their capacity to withstand disruption remains difficult for external evaluators (including investors) to observe. We develop a signaling game in which costly, observable strategic commitments can convey otherwise latent resilience. Using Chinese A‐share firm data (2011–2022), we examine annual stock price limit‐down events under the conventional approximately 10% daily price limit with panel Poisson regression and a complementary generalized additive model. Extreme‐weather exposure is positively associated with limit‐down incidence, particularly among firms with greater public visibility. The association is weaker among firms with AI‐related patents, declining accounts payable, or improving environmental (E‐pillar) performance. These findings are consistent with technological, supply‐chain liquidity, and environmental commitments serving as positive, countervailing resilience signals. By examining realized downside events at an exchange‐defined boundary, we extend climate–finance research and highlight the role of strategic resilience decisions and credible disclosure in market evaluation.