Climate Risk, Digital Intelligence Transformation and Supply Chain Resilience

Abstract

Climate risk poses growing threats to corporate supply chain resilience (SCR). Reducing the negative impact of climate risk on SCR has become an important and urgent issue that needs to be addressed. This study measures supply chain resilience from diversification and stability and examines this issue using a panel dataset of Chinese A-share manufacturing firms over the period 2003–2023. The results indicate that climate risk reduces SCR, including supply chain diversification and stability. An analysis of the mechanisms provides suggestive evidence that climate risk elevates firms’ operational risk and increases non-productive expenditures, thereby reducing SCR. Supply chain digitalization mitigates the negative effect of climate risk on supply chain diversification and stability, whereas intelligent manufacturing mitigates only the negative effect of climate risk on supply chain diversification. Heterogeneity analysis reveals that the negative impacts are most pronounced among firms with smaller market shares, those operating in high technology industries, and firms exposed to elevated climate policy uncertainty. Collectively, these findings extend the current literature on how climate risk affects firms and offer insights into how firms manage supply chains under the influence of climate risk.