High temperature, power rationing, and firm performance
研究了高温天气下政府限电策略的合理性，发现高温显著降低企业用电和绩效，而将工业用电转向居民虽损害企业但整体福利最优。
This paper develops a theoretical framework and provides causal evidence explaining the rationality of government-imposed power rationing strategies during high-temperature periods in electricity systems lacking market mechanisms and price signals. By combining comprehensive panel data on Chinese firms with high-resolution meteorological data , we document robust evidence that high temperatures significantly reduce both electricity usage and operational performance among firms. We then construct supply shocks based on precipitation anomalies weighted by the inter-provincial hydropower dependence to identify power rationing. These analyses demonstrate the persistent prevalence of firm-level power rationing across China in recent years. Furthermore, we show that while redirecting electricity from industrial to residential sectors during heat-induced shortages reduces firm performance, this represents a welfare-maximizing outcome from a social planner's perspective. Our findings reveal how climate change intensifies inter-sectoral electricity competition, with market inefficiencies playing a critical role in explaining China's rationing patterns.