Abstract
International business activity has to adapt to a number of new challenges, including higher temperatures and flood risks. The adaptation process will depend partly on the development of new forms of risk analysis for decision-making. This paper identifies statistically significant differences in regional temperature risk profiles, and develops climate change risk rankings for 11 regions of the globe. The methodology is based on a univariate time series analysis of regional mean temperatures, and takes into account the extent to which extreme temperature events cluster together, an important factor in weather-related risk analysis. The implications of the empirical results are discussed, with particular reference to the insurance and reinsurance markets.
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Acknowledgements
The dataset (HadCRUT2(v)) was prepared for the UK Meteorological Office by the Hadley Centre in collaboration with the Climatic Research Unit of the University of East Anglia. My thanks are also due to Professor Sumit K Majumdar and anonymous referees for their patience and helpful comments on earlier versions of this paper, and to Chan Ka Yi Charles of the Ming An Insurance Company (Hong Kong) Ltd for copious background information on catastrophe risk management.
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Accepted by Sumit K. Majumdar, Departmental Editor, 9 December 2006. This paper has been with the author for three revisions.
Appendix
Appendix
Regional classifications
The names in bold are those used in the HadCRUT2(v) dataset. The corresponding acronyms in brackets are those used by the author in Tables 1 and 2. Latitudes and longitudes are given where appropriate. Countries are those fully or partly within the geographic region: N=north, S=south, E=east, W=west, C=central. Table A
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Romilly, P. Business and climate change risk: a regional time series analysis. J Int Bus Stud 38, 474–480 (2007). https://doi.org/10.1057/palgrave.jibs.8400266
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DOI: https://doi.org/10.1057/palgrave.jibs.8400266