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Greater vulnerability but stronger recovery: The double-edged role of industrial clustering in climate risk scenarios

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  • Li, Ying

Abstract

This paper explores the role of industrial clustering in shaping the economic impacts of extreme climate events. Using panel data from 366 cities in China, I find that cities with higher levels of industrial clustering are more vulnerable to immediate economic losses arising from extreme climate events due to their more specialized firms and complex economic structures. However, they exhibit stronger economic recovery capacity in the long term through knowledge spillovers and factor market integration. My findings underscore the dual role of industrial clustering, which serves as both a source of vulnerability and recovery capacity, providing important implications for climate adaptation strategies.

Suggested Citation

  • Li, Ying, 2025. "Greater vulnerability but stronger recovery: The double-edged role of industrial clustering in climate risk scenarios," China Economic Review, Elsevier, vol. 93(C).
    • Handle: RePEc:eee:chieco:v:93:y:2025:i:c:s1043951x25001154
    DOI: 10.1016/j.chieco.2025.102457
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    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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