High temperatures and urban entrepreneurship levels: Evidence from China

This paper performed as a frontier try to investigate the effect of high temperatures on entrepreneurship, assessed from an urban perspective. This paper estimated the impact of high temperatures on urban entrepreneurship levels using data from 281 prefecture cities in China, during the period 2000-2017. This paper found that a single day with a temperature of above 30 degrees C led to a decrease of 0.47 % in urban entrepreneurship levels, compared with a single day recording comfortable temperatures. Following a series of robustness tests, the results were found to be significant. Next, this paper conducted a series of heterogeneity analyses and discovered that cities with advanced industrial structures, larger sizes and more essential hierarchies were less affected by high temperatures. Finally, this paper further analyzed the potential influence mechanisms of high temperatures on entrepreneurship. This paper found that high temperature affects urban entrepreneurship levels by worsening the entrepreneurial environment, especially by reducing human capital, hindering innovation, decreasing the financial support available to enterprises, and hindering economic development. The results of our study have thus enriched the literature on entrepreneurship by exploring the impact of climate change on entrepreneurship.