Climate physical risks and corporate investment efficiency: evidence from supply chain spillover effects

Abstract

As a critical transmission channel of corporate risk contagion, supply chains serve as a vital pathway for the cross-firm propagation of climate physical risks, and clarifying such risk transmission mechanisms is essential for stabilizing corporate investment efficiency amid volatile market environments. This study constructs a novel supplier climate physical risk index by integrating data from the Top Five Supplier Procurement Information Table, Chinese Industrial and Commercial Enterprise Information, and the China Climate Physical Risk Dataset, and empirically examines how supplier-side climate physical risks shape corporate investment efficiency. The results indicate that the increase in supplier climate physical risks significantly reduces the investment efficiency of enterprises, and this conclusion still holds true after a series of robustness tests. Specifically, it affects the investment efficiency of enterprises by reducing their risk-taking ability and compressing their commercial credit financing channels. Enterprises with poor supply chain resilience, low credit availability, high proportion of fixed assets, and low R&D investment are more susceptible to the impact of supplier climate physical risks, resulting in a more significant decrease in investment efficiency. This study expands the theoretical boundary of Climate Physical Risk economics and supply chain financial governance, and provides empirical evidence and practical implications for Chinese enterprises to mitigate supplier Climate Physical Risk shocks and stabilize high-quality investment development.