Biography

Hélia Costa is an Economist at the Structural Policy and Research Division of the OECD Economics Department. Her research focuses on structural policy, firm dynamics, and productivity, with a particular emphasis on the macroeconomic and firm-level implications of climate change. Before joining the OECD, she worked at the London School of Economics, the Toulouse School of Economics, and the University of Oxford. She holds a PhD in Economics from the European University Institute in Italy.

Abstract

We develop new evidence on how climate-related shocks affect firms, focusing on both flooding and heat stress. First, using high-resolution geospatial data matched to firm-level balance sheet information, we analyse the impact of flooding on firm performance across 17 developed economies over the period 2000–2018 . The results show that floods primarily reduce firms’ capital stocks, with persistent effects over several years, sizeable spillovers to nearby firms, and slower recovery for smaller and financially constrained firms. These findings are complemented by evidence on heat stress, which operates through a different channel by reducing labour productivity. Finally, we discuss how these micro-level effects are embedded in a broader general equilibrium framework (OECD-CASGEM), providing a unified perspective on the macroeconomic implications of climate shocks and the role of policies that support resilience and adaptation.

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