Firms under water! harmful algal blooms and corporate performance of coastal enterprises in China

This study examines how harmful algal blooms (HABs), a form of environmental disaster, affect corporate performance in coastal China. Using quarterly data from A-share listed companies (2000–2020) matched with HABs disaster records, this study combines corporate operational metrics with HABs spatial–temporal characteristics to assess their impact on firm performance. The results demonstrate that HABs events significantly diminish the market valuation of coastal enterprises, with impact magnitude driven by the scale and duration of outbreaks while exhibiting no significant association with disaster intensity. The adverse impacts of HABs are dynamic and persistent, leading to destabilized corporate credit, reduced cash flow, and diminished market confidence among management and institutional investors. Notably, small and medium-sized enterprises, non-state-owned firms, and businesses in economically developed regions experience disproportionate losses in market performance and enterprise value. This research contributes to the literature by quantifying the long-term economic risks of ecological disasters on capital markets in emerging economies. Furthermore, it emphasizes the necessity of integrating natural disaster management into the risk management frameworks of coastal enterprises.