<p>As global climate change intensifies, the increasing frequency of extreme weather events has emerged as a critical concern for the global value chain (GVC) division of labor. This study constructs a spatial panel Durbin model using multi-country panel data to systematically examine the direct effects, spatial spillover effects, and heterogeneity of the Global Climate Physical Risk Index (GCPRI) on GVC participation.Our findings are three-fold. First, extreme weather physical risks exert a significant negative direct effect on domestic GVC participation. This suggests that local climate shocks weaken a country’s embedding and upgrading capabilities through infrastructure damage, diminished labor productivity, and increased operational uncertainty. Second, these risks generate significant positive spatial spillover effects via global trade networks, which outweigh the direct negative impacts. Driven by risk-averse and cost-minimizing motives, multinational enterprises reorganize supply chains in response to climate shocks in partner countries, creating opportunities for order relocation, market substitution, and enhanced GVC participation in recipient economies. Third, the total effect is significantly positive, highlighting the dynamic adaptability and resilience of the GVC system under climate-induced stress. Heterogeneity analysis reveals a bifurcated pattern: developing countries, Southern Hemisphere nations, and service-oriented economies achieve a net positive total effect due to strong spatial spillovers, whereas developed and Northern Hemisphere countries primarily bear the brunt of negative local and net effects. This study demonstrates that extreme weather influences GVC participation through the dual mechanisms of destructive shocks and opportunity reconfiguration, with the net outcome contingent upon a country’s position in the division of labor, economic structure, and trade characteristics.</p>