Climate change effects and their implications for the financial markets: Evidence from the United Kingdom

Ahmed R., Chen X. H., Hoang Y. H., Do-Linh C.

JOURNAL OF ENVIRONMENTAL MANAGEMENT, vol.366, 2024 (SCI-Expanded) identifier identifier identifier

  • Nəşrin Növü: Article / Article
  • Cild: 366
  • Nəşr tarixi: 2024
  • Doi nömrəsi: 10.1016/j.jenvman.2024.121782
  • jurnalın adı: JOURNAL OF ENVIRONMENTAL MANAGEMENT
  • Jurnalın baxıldığı indekslər: Science Citation Index Expanded (SCI-EXPANDED), Scopus, Academic Search Premier, International Bibliography of Social Sciences, PASCAL, Aerospace Database, Agricultural & Environmental Science Database, Aqualine, Aquatic Science & Fisheries Abstracts (ASFA), BIOSIS, CAB Abstracts, Communication Abstracts, Environment Index, Geobase, Greenfile, Index Islamicus, Metadex, Pollution Abstracts, Public Affairs Index, Veterinary Science Database, Civil Engineering Abstracts
  • Adres: Bəli

Qısa məlumat

This study aims to examine how the climate affects the behaviour of the stock market. To achieve this, we have drawn on daily data from Jan 2005 to Jan 31, 2023 and several environmental factors (e.g., temperature, humidity, cloud cover and visibility) to account for extreme weather conditions using the 21-day moving average and its standard deviation. The empirical analysis has revealed three key findings regarding the impact of weather on the stock market 's behaviour. First, various forms of extreme weather conditions consistently lead to influence stock behaviour. Second, results provide valuable insights into market behaviour and help investors to make more informed investment decisions. Third, the weather conditions have new information about the climate risk and investors should react to it swiftly in light of our findings. The saliency theory can help reconcile the theoretical conflicts between the real options and risk-shifting theories when it comes to investing in uncertain and extreme climate conditions.