AAWE, Economics Dept, New York University, 19 W 4th St, 6Fl., New York NY 10012aawe@wine-economics.org

AAWE Working Paper No. 220 – Economics

The impact of climate change on firm adaptation: A study of wine firms in South Australia

Jeremy Galbreath

Abstract

This study explores a relatively little understood aspect of climate change: to what extent physical changes in the climate impact on firm behavior. To explore the impact of physical changes in climate, changes in both temperature and rainfall are studied with respect to adaptive behavior. For a sample of 207 wine firms operating in South Australia, this study finds that changes in temperature and rainfall are associated with adaptive practices. Further, because of the nature of acquiring and leveraging information and knowledge on climate change to affect adaptation, the study predicts that absorptive capacity will moderate the relationship between climatic changes and adaptive practices. This postulate finds support. The study advances research on climate change and firm behavior. Contributions of the findings are discussed along with limitations and future research opportunities.

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