How regional institutions shape business resilience to climate disasters

Climate-related disasters increasingly disrupt industrial systems through cascading regional failures that exceed the reach of firm-level continuity plans. Yet empirical evidence on regionally coordinated continuity strategies remains limited. This study examines whether Area-based Business Continuity Planning (Area BCP) strengthens operational resilience in industrial complexes. Using panel data for 248 South Korean districts from 2010 to 2019, we construct a Business Continuity Index and an Area BCP Index measuring regional institutional capacity for coordinated disaster response. Fixed-effects and Difference-in-Differences analyses centred on the 2014 national reform show that districts with above-province-average pre-reform Area BCP capacity experienced 4.3–4.5% larger post-2014 improvements in business continuity than lower-capacity districts. The effects are stronger in districts with higher educational attainment and fiscal autonomy, while poverty and higher precipitation weaken continuity. Economic scale shows no systematic effect, and a higher social welfare budget share is inversely associated with continuity, suggesting constrained local trade-offs between social protection and adaptive investment. These findings identify regional institutional coordination as a critical foundation of climate-resilient business strategy in industrial clusters and regional production systems.