We study the interrelations among climate change (CC)-related extreme events, adaptation strategies, and product price performance within the California wine industry. Drawing upon the resource-based view of the firm, we formulate a hypothesis suggesting that the influence of CC-related extreme events on product performance is mediated by the adaptation strategies employed by firms. Adaptation to CC can be a source of differentiation advantage to firms. In this context, firms strategically adapt to the physical environment to secure access to vital natural resources amidst extreme CC disturbances. Subsequently, these adaptive measures translate into enhanced firm value. To assess our hypotheses, we employ a sample comprising 50,156 wine-winery-year observations for 535 wineries, spanning the years 1981 to 2019, matched with wildfire events. Our results indicate that the adoption of CC adaptation strategies can be a source of value for firms, enabling them to produce products that can be sold at a price premium. We also suggest that firm CC adaptation strategies mediate the relationship between CC-related extreme events and product price.
