Supply Chain Transmission of Hot Weather Shocks and Import-Based Adaptation

By combining supplier–customer linkages disclosed by Chinese listed firms (2010–2016) with upstream meteorological data and downstream customs records, we analyze how customer firms adapt to heat shocks transmitted through supply chains. Our findings show that hot weather at supplier locations leads to a significant rise in customer imports, and this effect persists even when suppliers and customers are geographically distant.

The results are robust across various samples, model specifications, and temperature measures. Heterogeneity analysis reveals that the response is more pronounced among customer firms with weaker bargaining power or better access to foreign markets. These patterns support an adaptation-based interpretation: supply chain-transmitted heat shocks are sufficiently consequential to induce firms to reallocate input sourcing abroad.