Climate effects on the diversification strategy of export firms: Evidence from China

significantly different from the baseline regression results. This suggests that unobservable fac- tors do not affect our conclusions, lending credibility to our findings. Model specification adjustment In the baseline regression, we use an ordinary least squares (OLS) regression to examine the relationship between temperature bins and export product diversification. Given the count integer nature of the dependent variable (number of export product categories), we adopt a count model in this section and use negative binomial regression to re-evaluate the relation- ship between temperature bins and export diversification (see Table 4, column 1). The consis- tently negative regression coefficients across all temperature bins show an inverted U-shaped relationship, confirming the baseline findings. Notably, this baseline conclusion remains robust to a change in the econometric methodology. In addition, we explore the non-linear relationship between temperature and export product diversification using a non-parametric model in the benchmark regression setting. In this section, we construct the following com- monly used parametric model to investigate the relationship between temperature and export product diversification. Diversityicrt ¼ a þ b1Tempicrt � Tempicrt þ b2Tempicrt þ d1Xcrt þ gi þ grt þ εicrt ð12Þ Tempirct represents the annual average temperature of city c for firm i in year t, and the meanings of the other variables remain consistent with the previous text. The focus is on the Table 4. Sensitivity analysis. (1) (2) (3) (4) (5)

Variables Diversity Diversity Diversity Diversity Diversity Temp×Temp -0.0920** (0.042) <-7˚C -0.0112*** -0.1082*** -0.1227* -0.1339** (0.000) (0.035) (0.068) (0.064) -7~2˚C -0.0072*** -0.0885*** -0.0937* -0.1213** (0.000) (0.028) (0.055) (0.050) -2~3˚C -0.0058*** -0.0644*** -0.0687* -0.0859** (0.000) (0.022) (0.041) (0.039) 3~8˚C -0.0029*** -0.0353* -0.0361 -0.0492 (0.000) (0.018) (0.034) (0.034) 13~18˚C -0.0028*** -0.0136 -0.0076 -0.0078 (0.000) (0.017) (0.013) (0.023) 18~23˚C -0.0101*** -0.0872** -0.0984** -0.1024** (0.000) (0.036) (0.049) (0.052) 23~28˚C -0.0094*** -0.0695** -0.0855* -0.0942** (0.000) (0.030) (0.044) (0.046) �28˚C -0.0108*** -0.0664** -0.0885** -0.1347** (0.000) (0.030) (0.044) (0.056) Temp 2.1621 (1.327) CV Yes Yes Yes Yes Yes FE Yes Yes Yes Yes Yes Observations 3,015,824 3,015,824 3,015,824 3,015,824 3,015,824 R2 0.737 0.763 0.737 0.737 https://doi.org/10.1371/journal.pone.0308391.t004 PLOS ONE Climate effects on the diversification strategy of export firms PLOS ONE | https://doi.org/10.1371/journal.pone.0308391 August 16, 2024 12 / 28