How Does Urban Climate-Resilience Governance Affect Corporate Green Transformation? Evidence from China

Abstract

Cities increasingly use resilience policies to manage climate risk, but it remains unclear how these policies alter firms’ green strategies. Using a difference-in-differences design, we analyze 2011–2023 panel data for A-share listed firms around China’s Climate-Resilient City Construction (CRCC) pilot. CRCC exposure is associated with a higher text-based measure of corporate green transformation. The estimate is stable in parallel-trends and placebo tests, alternative outcome measures, exclusions of confounding policies and shocks, alternative specifications, double machine learning, pre-policy propensity-score matching, and instrumental-variable estimation. Mechanism estimates are consistent with three channels through which CRCC may affect firm behavior. CRCC strengthens executive green cognition, redirects environmental spending toward prevention, and supports green technological and management innovation. By contrast, the estimate for end-of-pipe investment is small and statistically insignificant. A pooled interaction test finds differences across firm life-cycle stages. Comparisons by city size, exemplary-city status, and supply-chain resilience remain descriptive because their grouping indicators are unavailable for pooled re-estimation. Spatial estimates reveal limited, non-monotonic spillovers. Overall, the results indicate that an urban adaptation policy can influence firm strategy, subject to the text-based outcome and the sample of Chinese listed firms.