With the increasing intensity of climate change, the impacts caused by climate change are receiving more attention. As agricultural production is directly related to climate conditions, most scholars have investigated the profound effects of climate change on agriculture. In fact, industrial production is inevitably affected by climate change as well, but unfortunately, research in this area is relatively scarce. Only few studies have focused on the perspective of enterprise production, and there is rare exploration of the impact of climate change on micro-enterprises from the perspective of site selection.
In order to expand the research perspective of existing literature, this paper uses Chinese meteorological data, Chinese industrial enterprise data, and relevant data from China City Statistical Yearbook to conduct in-depth analysis of the impact of temperature change on enterprise site selection decisions. Specifically, this paper adopts the methods of Hsiang (2010) and Deryugina and Hsiang (2014) to construct two variables, quarterly average temperature and temperature box, to measure temperature change. In addition, this paper examines the impact of extreme temperature on enterprise site selection decisions by using daily maximum temperature data to construct the variable of extreme temperature days. Then, referring to the method of Zhou Hao and Chen Yi (2013), the variable of newly established enterprises is constructed using the “year of establishment” information in Chinese industrial enterprise data, in order to measure enterprise site selection decisions. The study finds that enterprise site selection decisions are significantly influenced by temperature change. For example, an increase in average temperatures during summer and autumn and a decrease in average temperatures during winter would significantly reduce the number of newly established enterprises in the local area, and an increase in extreme temperature days would also have a significant negative impact on the number of newly established enterprises in the local area. Moreover, this impact varies by ownership type, industry type, and the level of economic development and temperature volatility. The mechanism test results indicate that temperature change primarily affects enterprise site selection decisions through two pathways: reducing the quantity and quality of labor supply in the region and enhancing environmental regulation.
Compared with previous literature, this paper expands in several aspects: Firstly, it enriches the relevant literature on factors influencing enterprise site selection decisions. The existing literature mostly focuses on studying the factors influencing enterprise site selection decisions from the perspective of the enterprise itself or the external economic environment, with little attention to the influence of external climate factors on enterprise site selection decisions. This paper focuses on the climate change for in-depth research. Secondly, it complements the relevant research on the economic impacts of climate change. The existing research mostly analyzes it from the perspective of the overall economy or enterprise production. Yet no literature covers how climate change affects enterprise site selection decisions. This paper provides beneficial supplementation in this regard. Thirdly, it comprehensively constructs indicators to measure temperature change. This paper constructs three indicators (including quarterly average temperature, temperature box, and extreme temperature) to measure temperature change, which can accurately identify the impact of temperature change on enterprise site selection decisions.
The research in this paper to a certain extent confirms that climate change will have a significant impact on the economy. For industrial enterprises, climate change will affect not only the production of existing enterprises, but also the site selection decisions of new enterprises. Therefore, it is urgent to address the issue of climate change. This paper provides empirical evidence for local governments to formulate climate change policies tailored to local conditions, which helps to raise awareness of government departments in dealing with the impacts of climate change.