Incentive effects of climate change health adaptation policy on the capital market: evidence from China

As climate change intensifies public health threats, profit-maximizing producer behaviour exacerbates healthcare supply-demand mismatches. This underscores the urgent need for coordinated interventions between public and private healthcare systems to build more resilient and equitable health governance systems. This study focuses on the climate change health adaptation policy (abbreviated as CCHA policy), integrating theoretical exploration and empirical testing to assess how CCHA policy shapes the dynamic responses of the healthcare stock market. Specifically, the study develops a ‘climate policy – healthcare stock market’ alignment framework; draws on prospect theory, signalling theory, and risk management theory to analyze the mechanisms; and applies the event study method, fixed-effects model, and the Fama – French model to reveal the magnitude of market responses. The findings show that the CCHA policy drives positive responses in the healthcare stock market through innovation and signalling effects; benefiting from risk management effects, the healthcare services and medical devices sectors exhibit increased abnormal returns, while the healthcare commerce sector remains insensitive. This study contributes by innovatively developing an assessment model of climate change health adaptation policy impacts on the healthcare stock market within an integrated macro – micro research framework, thereby theoretically expanding the boundaries of economic evaluations of climate policies. It also provides support for further policy implementation, corporate strategic responses, and the collaborative development of climate-related health adaptation between the Global North and South.