Climate Risk and Intra-Firm Wage Inequality

This replication package provides the data, code, and documentation necessary to reproduce the main empirical results of the paper “Climate Risk and Intra-Firm Wage Inequality.”
The paper examines how firm-level climate risk affects the internal distribution of compensation between executives and rank-and-file employees in Chinese A-share listed firms over the period 2010-2022. Using a text-based climate risk index constructed from annual reports, we document that higher climate risk is associated with a wider executive-employee pay gap, driven primarily by wage suppression rather than increases in executive pay. We further explore two mechanisms: (i) an executive leverage channel related to agency costs and managerial bargaining power, and (ii) a climate-induced labor substitution channel via automation and AI adoption.
The replication materials are organized to maximize transparency and facilitate independent verification of all statistical analyses reported in the main text and appendices.
The Data folder contains the fully matched firm-region-industry-year panel dataset used for all empirical analyses in the paper, as well as several auxiliary files that separately document the construction of core explanatory variables, dependent variables, control variables, mechanism variables, and heterogeneity-related variables.
Due to licensing and access restrictions, raw firm-level financial data and certain regional indicators from commercial databases cannot be redistributed. The replication package therefore provides the constructed variables used in the analysis, together with placeholder fields and detailed documentation that enable researchers with access to the original sources to reconstruct the full dataset.