2 Clear heterogeneity exists in the impact of extreme rainfall across different dimensions. From a sectoral perspective, agricultural processing and outdoor production industries are the most vulnerable, suffering severe productivity declines under extreme rainfall. In terms of firm ownership, foreign-owned firms are highly susceptible—experiencing a 12.91% productivity loss from ≥250mm rainfall—while state-owned firms demonstrate strong resilience with no significant productivity response rainfall measured via annual/seasonal totals, bins (e.g., ≥250mm), anomalies, and lagged effects. Robustness checks include adjusting econometric settings, controlling snowfall, and testing alternative rainfall bin references. Heterogeneity analysis covers sectors (labor/capital-intensive), ownership (state/foreign-owned), and regions (southern rainy/ northwestern arid), with productivity validated via OP, LP, and labor productivity measures. Findings and Analysis Extreme Rainfall Induces Significant Productivity Losses Extreme rainfall exerts a pronounced negative impact on the productivity of Chinese manufacturing firms, with losses escalating as rainfall intensity increases. Specifically, a single day of daily rainfall ≥250mm (extraordinary storm) leads to a 1.77% productivity loss, while 100– 250mm (downpour) and 50–100mm (torrential rain) result in losses of 1.51% and 0.19% respectively. In contrast, rainfall ≤50mm (including moderate rain and drizzle) shows no significant negative effects on productivity. Seasonally, summer and autumn rainfall have notable adverse impacts on firm productivity, whereas spring and winter rainfall do not trigger significant productivity fluctuations. Heterogeneous Vulnerability Across Firms, Sectors, and Regions Regionally, firms in southern China (a rainy region with an annual average rainfall of 1730mm) face far greater losses from extreme rainfall, whereas firms in arid northwest China (with only 399mm annual average rainfall) are minimally affected due to the rarity of extreme rainfall events. Additionally, labor-intensive, lowtech, and less productive firms are more prone to rainfallinduced productivity losses compared to their capitalintensive, high-tech, and more developed counterparts. Three Core Channels of Productivity Loss The study identifies three primary mechanisms through which extreme rainfall reduces manufacturing productivity. First, labor supply is impaired: a single day of ≥250mm rainfall leads to a 2.95% reduction in labor supply for manufacturing firms, with labor-intensive firms experiencing an even steeper 4.31% decline. Second, agricultural spillover effects occur: manufacturing firms dependent on agricultural intermediate inputs suffer a 2.56% productivity loss from ≥250mm rainfall, as extreme rainfall disrupts agricultural production and the supply of raw materials. Third, transport disruptions emerge: transport-dependent firms face a 6.47% productivity loss from ≥250mm rainfall, far exceeding the baseline average of 1.77%, due to rainfall-induced damage to transport infrastructure and hindered material transportation. Effective Adaptation Strategies Mitigate Losses Firms and policymakers have adopted multiple adaptation measures to alleviate the negative impacts of extreme rainfall. At the firm level, manufacturing enterprises increase investments in non-productive inputs such as insurance and inventory to hedge against rainfall risks, which effectively mitigates extreme rainfall-induced productivity losses. Non-state-owned firms also adjust their market entry and exit strategies in response to extreme rainfall, enhancing overall resilience. Table 1 Summary of data sets The impact of rainfall on productivity: Implications for Chinese manufacturing Public Policy BULLETIN
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