Climate change, access to credit and grain productivity: evidence from counties in China’s major grain producing provinces

Climate change is increasingly reshaping agricultural production conditions worldwide, and safeguarding stable grain supply remains a core policy priority for China. In this context, understanding how shifts in temperature and precipitation affect grain productivity, and whether rural finance accessibility can strengthen resilience, is of both academic and practical relevance. This study examines the impacts of climate change on grain productivity and the moderating role of distribution of financial institutions. Using panel data for 334 counties in China’s 13 major grain producing provinces over 1998 to 2022, this study employs the two way fixed effects panel regression model and the 2SLS model approach for empirical analysis. The results show that both precipitation and temperature exhibit significant nonlinear relationships with grain productivity, consistent with an inverted U-shaped pattern. While access to credit, proxied by the distribution of bank outlets, also promotes grain productivity. Importantly, access to credit moderate climate impacts on grain productivity on both sides of the turning point, with a stronger buffering effect above the threshold. Mechanism analysis further suggests that credit enhances climate resilience partly by increasing agricultural mechanization and irrigation capacity, which mitigates climate related production losses. These findings highlight the value of climate oriented rural finance and improved financial access in supporting resilient grain production systems in China.