The Impact of Temperature Changes on Industrial Production in China and Its Mechanism Analysis

This paper uses micro data of Chinese industrial enterprises from 1998 to 2007, combined with weather data from the same period, to examine the impact of temperature changes on industrial production and its mechanism. The study finds a nonlinear relationship between industrial output and temperature changes: rising summer temperatures significantly reduce industrial output, while rising winter temperatures increase industrial output; daily temperatures below or above [12 °C,15 °C) both negatively affect industrial output. In addition, seasonal temperature fluctuations also have adverse effects on industrial output. Further mechanism test results show that high temperatures indirectly affect output by reducing the total factor productivity, total fixed assets, investment, and innovation capability of industrial enterprises. From the estimation results of the sub-sample, the negative impact of rising summer temperatures on industrial output varies depending on the industry and ownership of the enterprise. Finally, the paper predicts that future global warming will lead to a decrease in China’s industrial output by about 3.0–14.6% in the medium term and about 5.9–20.0% in the long term.