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Nowcasting Firms’ Operating Activities from Satellite Data on Thermal Infrared Radiation
Published online by Cambridge University Press: 08 September 2025
Abstract
Practical real-world activities consume energy and emit thermal infrared radiation (TIR). Leveraging this physical fact, we develop a direct, real-time measure of firms’ operating activity using satellite data. Tracking 28,236 factories of Chinese listed firms, we find TIR declines significantly following operational shocks and strongly forecasts subsequent sales growth, costs, investment, employment, and profits. TIR also predicts future stock returns, especially among opaque firms and those with limited investor access, yet sophisticated investors largely ignore this information. Our findings highlight TIR as a distinctive, under-exploited indicator of corporate fundamentals.
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- Research Article
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- © The Author(s), 2025. Published by Cambridge University Press on behalf of the Michael G. Foster School of Business, University of Washington
Footnotes
We thank one anonymous referee and Kai Li (the editor) for their valuable comments. Xiaofeng Zhao acknowledges that the work described in this paper was fully supported by a grant from the Research Grants Council of the Hong Kong Special Administrative Region, China (Project No. LU13500021). We acknowledge data support provided by Alt Data Tech (https://www.altdatatech.com) and professional English language editing support provided by AsiaEdit (asiaedit.com).
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Xue et al. supplementary material
Xue et al. supplementary material
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