Economic costs of climate shock for firms in emerging economies

Article

Arian, A. and Sands, J.. 2025. "Economic costs of climate shock for firms in emerging economies." Tourism Economics: the business and finance of tourism and recreation. 0 (0), pp. 1-7. https://doi.org/https://doi.org/10.1177/13548166251369308
Article Title

Economic costs of climate shock for firms in emerging economies

ERA Journal ID36279
Article CategoryArticle
AuthorsArian, A. and Sands, J.
Journal TitleTourism Economics: the business and finance of tourism and recreation
Journal Citation0 (0), pp. 1-7
Number of Pages1-7
Year2025
Place of PublicationUSA
ISSN1354-8166
2044-0375
Digital Object Identifier (DOI)https://doi.org/https://doi.org/10.1177/13548166251369308
Abstract

This study examines the effect of physical climate shocks on firm investment behaviour across 43 emerging economies. drawing on 8,775 firm-year observations from the tourism and hospitality (T&H) sector, we find that firms operating in a high climate-risk environments exhibit systematically lower investment efficiency. The results indicate that heightened climate exposure prompts a shift towards 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.

Keywordsphysical climate risk, investment efficiency, tourism and hospitality, emerging markets, corporate financial strategy
Contains Sensitive ContentDoes not contain sensitive content
ANZSRC Field of Research 2020350899. Tourism not elsewhere classified
Byline AffiliationsSchool of Business
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