Temperature and Local Industry Concentration / Jacopo Ponticelli, Qiping Xu, Stefan Zeume.

Format:

Book

Author/Creator:

Ponticelli, Jacopo.

Contributor:

National Bureau of Economic Research.

Xu, Qiping.

Zeume, Stefan.

Series:

Working Paper Series (National Bureau of Economic Research) no. w31533.

NBER working paper series no. w31533

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2023.

Summary:

We use plant-level data from the US Census of Manufacturers to study the short and long run effects of temperature on manufacturing activity. We document that temperature shocks significantly increase energy costs and lower the productivity of small manufacturing plants, while large plants are mostly unaffected. In US counties that experienced higher increases in average temperatures between the 1980s and the 2010s, these heterogeneous effects have led to higher concentration of manufacturing activity within large plants, and a reallocation of labor from small to large manufacturing establishments. We offer a preliminary discussion of potential mechanisms explaining why large manufacturing firms might be better equipped for long-run adaptation to climate change, including their ability to hedge across locations, easier access to finance, and higher managerial skills.

Notes:

Print version record

August 2023.