Difference-in-Differences Test for the Effect of Extreme Weather upon Enterprise Productivity

Abstract

This paper establishes DID and PSM-DID models to examine the effect of extreme weather on enterprise productivity, using empirical evidence from natural experiments of torrential rainstorm in Zhengzhou of China. Based on analysis of empirical results, we find that extreme weather has a negative impact on enterprise productivity, psychological capital plays a regulatory role in this influence, and decrements of enterprise productivity with high psychological capital is smaller than enterprises with low psychological capital. The results of this study provide empirical data support to understand the negative effect of extreme weather upon enterprise productivity and the positive role of employee psychological capital.

Keywords

• difference-in-differences model
• propensity score matching-difference in differences model
• extreme weather
• effect
• 00a71