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Information-based resilience: Credit line disclosure as strategic response to natural disasters

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  • Pan, Lulu
  • Xu, Mengmeng

Abstract

This paper investigates how firms build information-based resilience through strategic financial disclosure in the aftermath of natural disasters. Focusing on credit line information as a crucial indicator of financial flexibility and banking relationships, we examine firms' disclosure strategies using a stacked difference-in-differences approach and quarterly data from Chinese-listed firms during 2013–2021. We find that firms in disaster-affected areas significantly increase their credit line disclosures following natural disasters, suggesting an active approach to information-based resilience building. The mechanism tests then demonstrate that this strategic choice lies specifically in disclosing non-binding credit intentions, allowing them to signal resilience while retaining flexibility, rather than prioritizing secured or non-local bank credit. Last, heterogeneous analyses show that this resilience-building effect is more pronounced among highly leveraged firms, under-followed firms, and firms confronting flood disasters. Our findings contribute to understanding how firms utilize information disclosure as a strategic tool for building and signaling resilience in response to natural disasters.

Suggested Citation

  • Pan, Lulu & Xu, Mengmeng, 2026. "Information-based resilience: Credit line disclosure as strategic response to natural disasters," China Economic Review, Elsevier, vol. 97(C).
    • Handle: RePEc:eee:chieco:v:97:y:2026:i:c:s1043951x26000349
    DOI: 10.1016/j.chieco.2026.102684
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