The Impact of Extreme Heat on Corporate Social Responsibility Performance: Evidence From Chinese Listed Firms

This study investigates the impact of extreme heat on corporate social responsibility (CSR) performance. Drawing on firm-level panel data of Chinese A-share listed firms from 2010 to 2019, we employ a two-way fixed-effects model to empirically test our hypotheses, complemented by robustness checks using alternative extreme heat definitions, extended samples with multiple CSR measures, and instrumental-variable (IV) estimation to ensure the rigor of our results. The analysis yields four key findings. First, extreme heat significantly reduces overall CSR performance, with the impact concentrated in environmental, employee, and supply-chain responsibilities, whereas shareholder and social-contribution dimensions remain largely unaffected. Second, the reduction in CSR is more pronounced among state-owned enterprises (SOEs) than non-SOEs, likely reflecting their broader social obligations that divert resources away from CSR under climate stress. Third, the mediation analysis indicates that this reduction is driven primarily by extreme heat's adverse effect on financial performance, which forces firms to reallocate resources toward short-term survival rather than CSR. Finally, organizational slack and stronger environmental regulation mitigate the negative impact of extreme heat, while green innovation alleviates these effects only when pursued through sustained, long-term efforts, highlighting the importance of cumulative investment in innovation-driven resilience. These findings contribute to the understanding of how persistent climate shocks reshape corporate responsibility strategies and provide actionable insights for policymakers and firms to balance financial pressures with sustainability goals.