The impact of extreme precipitation on agricultural enterprises’ insurance purchasing behavior

Against the backdrop of increasing frequency of extreme weather events and growing urgency of agricultural risk management, an in-depth investigation into their impact on the risk response behaviors of agricultural enterprises holds significant practical and theoretical importance. This study systematically examines the impact of extreme precipitation on the insurance-purchasing behavior of agricultural enterprises using a sample of 304 Chinese listed companies from 2011 to 2022. The study finds that (i) extreme precipitation significantly positively affects agricultural enterprises’ insurance-purchasing behavior. (ii) Extreme precipitation reduces agricultural yields and triggers market panic, jointly influencing agricultural enterprises’ insurance-purchasing behavior through the output loss and the emotional panic pathways. (iii) The effect of extreme precipitation on agricultural enterprises’ insurance-purchasing behavior varies significantly across firms with different ownership structures and industrial attributes, with nonstate-owned and resource-intensive enterprises being more sensitive to such shocks. This study provides empirical evidence for understanding the risk response mechanisms of agricultural enterprises under climate change and offers insights into improving agricultural insurance policies and promoting differentiated risk management strategies.