Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments July 16, 2023 erstellt
Beschreibung:
We investigate the impact of escalating temperature and heavy rainfall on the default probability of small and micro firms (SMiEs) in six European countries from 2005 to 2014. Our findings reveal that a one standard deviation increase (2.56°C) in the yearly mean temperature amplifies a firm’s default probability by 86.5 basis points. Additionally, a one standard deviation increase (2.46mm) in the Simple Precipitation Intensity Index augments the default probability by 32.4 basis points. Micro and financially constrained firms demonstrate increased susceptibility to these physical risks. Heterogeneous weather impacts on default probability are also observed across different industries. Notably, when the ultimate owner also functions as the firm’s manager, they can potentially mitigate the adverse effects of rising temperature and heavy rainfall