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Extreme temperature and enterprise digital transformation

shocks will accelerate the digital transformation of dynamic optimization of the workforce through a
manufacturing companies needs to be further examined. “survival of the fittest” approach.
To address the gap in literature, we constructed and Unlike the direct impact of extreme temperatures
measured the extreme temperature index of prefecture- on agriculture, which is often described as “dependent
level cities based on the data of China’s A-share- on the weather,” 25-27 the effects on industrial enterprises
listed manufacturing enterprises from 2011 to 2022; are more nuanced. Beyond increased production
empirically examined the impact of extreme temperature costs, extreme temperatures also reduce operational
on the digital transformation of listed manufacturing efficiency. High temperatures impair workers’ attention
enterprises; and validated and analyzed the mechanism and decision-making abilities, thereby lowering
and moderating effect. Possible contributions of the productivity. 28-30 In addition, industrial output exhibits
research in this paper include the following: first, it an optimal temperature range; deviations above or
complements the relevant research on the micro impact below this range result in significant declines in output.
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of extreme temperature. Existing literature related to Rising temperatures exacerbate energy consumption,
extreme temperatures mostly focuses on the industry particularly for electricity 31,32 and cooling systems,
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level and lacks research on micro groups. Second, it leading to higher energy costs, and reduced total factor
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provides lessons and sheds light on effective measures productivity (TFP) and fixed asset turnover efficiency. 9
for companies to cope with extreme temperature events Digital transformation can mitigate these challenges
to minimize economic hazards, addressing the lack of by enhancing productivity through cost reduction,
research on related countermeasures. innovation, and optimized production processes. By
minimizing downtime, conserving resources, and
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2. Research hypothesis improving TFP, enterprises can better withstand the
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adverse impacts of extreme temperatures. Therefore,
Extreme temperatures pose significant risks to health and this paper argues that extreme shocks accelerate the
safety of workers employed by businesses, increasing digital transformation of enterprises. The research
the likelihood of heat-related illnesses and accidents. framework is illustrated in Figure 2, whereas the
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These conditions lead to reduced productivity, higher research hypotheses are given below:
absenteeism rates, and ultimately diminished business H : Extreme temperatures positively impact enterprise
performance. 17-19 To counteract these effects, labor inputs 1 digital transformation.
may be increased to meet production targets, but such H : Extreme temperatures increase enterprise cost
strategy could incur higher costs. Furthermore, health- 2 pressure, reduce enterprise productivity, and thus
related concerns and abnormal temperature fluctuations accelerate enterprise digital transformation.
can trigger labor migration, altering inter-regional labor
supply dynamics. Regions frequently experiencing 3. Data, variables, and methods
extreme temperatures often face a decline in both the
quantity and quality of labor supply, driving up wages 3.1. Study area and data sources
and employment costs. 20-24 Digital transformation offers 3.1.1. Study area and research subjects
a solution by automating routine and repetitive tasks, This study covers 287 prefecture-level cities in
reducing reliance on traditional labor, and enabling China’s major climatic zones – tropical/subtropical

Figure 2. Research framework

Volume 22 Issue 4 (2025) 125 doi: 10.36922/AJWEP025210166