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Influence of natural disasters on stock prices in the aviation, hospitality, and tourism industries: Perspective based on crash risk and investor sentiment

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  • Hu, Zuwu
  • Liu, Ling

Abstract

This study explores how natural disasters affect stock prices and examines the underlying mechanisms using panel data from China's aviation, hospitality, and tourism industries for the period 2011–2022. Results indicate that natural disasters considerably suppress stock performance because the natural consequence of increased crash risk reduces stock returns. In such a situation, investor sentiment serves as a buffer, because heightened sentiment helps mitigate the negative impact of disasters on stock prices. In addition, results of heterogeneity analysis indicate that small and medium-sized enterprises and firms in highly competitive industries are more vulnerable to shocks caused by natural disasters and face greater risks to their stock performance.

Suggested Citation

  • Hu, Zuwu & Liu, Ling, 2025. "Influence of natural disasters on stock prices in the aviation, hospitality, and tourism industries: Perspective based on crash risk and investor sentiment," Finance Research Letters, Elsevier, vol. 76(C).
    • Handle: RePEc:eee:finlet:v:76:y:2025:i:c:s1544612325002661
    DOI: 10.1016/j.frl.2025.107002
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