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

the export market, while the opposite trend is observed when temperatures fall below the opti- mal range. However, the effects in the lowest and highest temperature bins lack statistical sig- nificance. Consequently, there is no conclusive evidence indicating that extreme temperatures reduce the number of exported product categories by encouraging product exits. In addition, we examine this issue in more detail using data at the firm-product level. We build the following econometric model: Exitipcrt ¼ a þ X m6¼5bm 1 Tbinm crt þ d1Xcrt þ gi þ gpt þ grt þ εipcrt ð15Þ Where, Exitipcrt indicates whether product p of firm i has exited the export market in year t. If the product has exited, the value of Exitipcrt is 1; otherwise it is 0. The other variables retain their meaning from the previous context. The regression results, shown by the black triangles in Fig 5 (corresponding to the right axis), indicate the influence of temperature bins on the probability of products exiting the export market. The results are consistent with the effect on the number of exiting product categories. Specifically, temperatures above the optimal range tend to increase the probability of products exiting the export market, while the opposite is observed for temperatures below the optimal range. However, statistically, the effects in the low-temperature bins lack significance below a 10% threshold, while the effects in the high- temperature bins show some significance. Overall, temperatures above the optimal range mod- erately increase the likelihood of products leaving the export market.

Extensive research In the benchmark regression, our focus is on assessing the influence of temperature on firms’ export product diversification. Another important aspect of diversification in export strategies Fig 5. Temperature and product exits. The dots depict the impact of the temperature bins on the exiting product categories, corresponding to the values on the left-hand axis. The triangles. depict the impact of the temperature bins on the probability of products exiting the export market, corresponding to the values on the right-hand axis. https://doi.org/10.1371/journal.pone.0308391.g005 PLOS ONE Climate effects on the diversification strategy of export firms PLOS ONE | https://doi.org/10.1371/journal.pone.0308391 August 16, 2024 21 / 28