Economic costs of climate shocks for firms in emerging economies

Bibliographic Data

ID21689407
AuthorsAdam Arian (0000-0003-1438-5020, Australian Catholic University, corresponding author), Hassan F Gholipour (0000-0003-4714-8144, Western Sydney University), Richard Busulwa (0000-0003-4018-5057, Swinburne University, Australia), John Sands (0000-0003-0934-921X, University of Southern Queensland)
Year2025
Publication date2025-08-16
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueTourism Economics (JOURNAL)
Journal identifiersISSN: 1354-8166 • E-ISSN: 2044-0375
PublisherSAGE Publications (PUBLISHER • US)
DOI10.1177/13548166251369308
OpenAlexW4413301408
LanguageEN
References cited16

This study examines the effect of physical climate shocks on firm investment behaviour across 43 emerging economies. Drawing on 8775 firm-year observations from the tourism and hospitality (T&H) sector, we find that firms operating in high climate-risk environments exhibit systematically lower investment efficiency. The results indicate that heightened climate exposure prompts a shift toward conservative financial strategies—namely, reduced capital expenditure, greater earnings retention, and increased reliance on short-term financing. These findings underscore the economic costs of climate volatility at the firm level and highlight a structural trade-off between financial resilience and long-term growth in emerging markets

Climate change · Economic impact analysis · Economics · Economy · Emerging markets · Geography · Macroeconomics · Microeconomics · Natural resource economics · Tourism · Climate Change Policy and Economics · Energy, Environment, Economic Growth · Fiscal Policy and Economic Growth

Tools

Open DOIOpen Access