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“Not all climate risks are alike”: Heterogeneous responses of financial firms to natural disasters in China

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  • Chen, Yajie
  • Guo, Kun
  • Ji, Qiang
  • Zhang, Dayong

Abstract

This paper explores the capital market responses of financial firms to natural disasters in China. Using the event study approach, we demonstrate that the capital market responses of financial firms vary to the type of natural disaster. These heterogeneous responses are also affected by the type of financial firm. Security companies are generally more sensitive to all types of disasters and have statistically significant negative abnormal returns. Banks only respond to earthquakes, whereas insurance companies have generally insignificant cumulative abnormal returns to all three type of natural disasters.

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  • Chen, Yajie & Guo, Kun & Ji, Qiang & Zhang, Dayong, 2023. "“Not all climate risks are alike”: Heterogeneous responses of financial firms to natural disasters in China," Finance Research Letters, Elsevier, vol. 52(C).
    • Handle: RePEc:eee:finlet:v:52:y:2023:i:c:s1544612322007140
    DOI: 10.1016/j.frl.2022.103538
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    References listed on IDEAS

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    2. Shen, Yiran & Sun, Xiaolei & Ji, Qiang & Zhang, Dayong, 2023. "Climate events matter in the global natural gas market," Energy Economics, Elsevier, vol. 125(C).
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    4. Lei, Lei & Zhang, Dayong & Ji, Qiang & Guo, Kun & Wu, Fei, 2023. "A text-based managerial climate attention index of listed firms in China," Finance Research Letters, Elsevier, vol. 55(PA).
    5. Guo, Kun & Liu, Fengqi & Sun, Xiaolei & Zhang, Dayong & Ji, Qiang, 2023. "Predicting natural gas futures’ volatility using climate risks," Finance Research Letters, Elsevier, vol. 55(PA).

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