Physical climate change and the sovereign risk of emerging economies

Journal of Economic Structures

The Official Journal of the Pan-Pacific Association of Input-Output Studies (PAPAIOS)

Table 17 Robustness tests: impact of natural disasters on political stability

	(1)	(2)	(3)	(4)	(5)	(6)
	Political stability	Political stability	Political stability	Political stability	Political stability	Political stability
Drought	− 1.317 (1.488)
VeryWarmCountry \(\times\) Drought	− 3.221 (2.954)
DroughtDamage		− 1.083 (1.762)
VeryWarmCountry \(\times\) DroughtDamage		− 7.257*** (2.332)
Wildfire			− 9.970* (5.942)
VeryWarmCountry \(\times\) Wildfire			− 12.42 (9.729)
Flood				11.29*** (3.842)
VeryWarmCountry \(\times\) Flood				− 6.798 (8.455)
Storm					− 0.379 (4.425)
VeryWarmCountry \(\times\) Storm					− 6.055 (8.951)
Earthquake						− 10.68** (4.575)
VeryWarmCountry \(\times\) Earthquake						1.244 (10.25)
Precipitation	− 4.542 (17.91)	− 4.206 (17.82)	− 6.167 (18.55)	− 15.35 (17.13)	− 0.207 (17.25)	− 0.432 (18.01)
Observations	1242	1242	1242	1242	1242	1242
R-squared	0.888	0.889	0.888	0.890	0.888	0.888
Country FE	Yes	Yes	Yes	Yes	Yes	Yes
Region\(\times\)Year FE	Yes	Yes	Yes	Yes	Yes	Yes

This table shows robustness checks for the potential underlying channels of the temperature–sovereign risk connection. Political Stability is the corresponding World Bank Score, ranging from 0 to 100. Drought, DroughtDamage (droughts with a damage report) Wildfire, Flood, Storm and Earthquake are monthly dummies indicating the corresponding natural disaster, which are aggregated on the yearly level. VeryWarmCountry is a dummy for the countries in the warmest country group, see Table 5. Standard errors (in parentheses) are clustered at the country level and control for heteroscedasticity and serial correlation, ***, ** and * indicate statistical significance at the 1%, 5% and 10% level, respectively. See Table 18 for variable definitions and sources