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Climate risk and the productivity returns to agricultural digitalization
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DOI：10.3389/fsufs.2026.1894308.png)
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Abstract
En 中文
Climate risk is placing growing pressure on agricultural resilience; raising the question of whether digitalization helps firms maintain productivity under environmental stress. Using unbalanced panel data on Chinese A-share listed agricultural firms from 2007 to 2023; this study constructs a firm-level digitalization indicator from annual reports through text analysis and matches it with city-level climate physical risk data. The results show that the effect of two-period lagged digitalization on agricultural total factor productivity is nonlinear; with a climate-risk threshold of about 18.96. Below this threshold; the marginal effect is negative; above it; the effect turns positive. At the mean level of climate-risk; the marginal effect of digitalization is 0.244; and a one-standard-deviation increase in digitalization raises productivity by 0.066 units; or 8.06% of the productivity standard deviation. Under high climate-risk intensity; defined as one standard deviation above the mean; the marginal effect rises to 0.496; with an increase equal to 16.36% of the productivity standard deviation. Mechanism tests show that digitalization improves productivity under climate risk by easing financing constraints; increasing risk-taking capacity; and promoting green innovation. Heterogeneity analysis further shows that the climate-adaptive value of digitalization varies with human capital; network infrastructure; industry exposure; market institutions; and firms’ initial productivity. The study reveals the value of digitalization as adaptive capital rather than a universal efficiency tool.
Keywords:
digitalization
climate risk
agricultural total factor productivity
adaptive capacity
agricultural firms
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