Temperature Shocks and Establishment Sales. (14th February 2020)

• Record Type: Journal Article
• Authors: Addoum, Jawad M; Ng, David T; Ortiz-Bobea, Ariel
• Editors: Hong, Harrison
• Is Part Of: Review of financial studies. Volume 33:Number 3(2020)
• Page Start: 1331
• Page End: 1366
• Publication Date: 2020-02-14
• Subjects: G12 -- G14 -- Q54; Finance -- United States -- Periodicals; Finance -- Periodicals; 332
• DOI: 10.1093/rfs/hhz126
• Languages: English
• ISSNs: 0893-9454

Abstract

Abstract: Combining granular daily data on temperatures across the continental United States with detailed establishment data from 1990 to 2015, we study the causal impact of temperature shocks on establishment sales and productivity. Using a large sample yielding precise estimates, we do not find evidence that temperature exposures significantly affect establishment-level sales or productivity, including among industries traditionally classified as "heat sensitive." At the firm level, we find that temperature exposures aggregated across firm establishments are generally unrelated to sales, productivity, and profitability. Our results support existing findings of a tenuous relation between temperature and aggregate economic growth in rich countries.