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Is a picture really worth a thousand words? Investigating the impact of investor sentiment on sustainable stocks

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  • Mokni, Khaled
  • Nammouri, Hela
  • Dhaoui, Chedia
  • Ben Jabeur, Sami

Abstract

This paper examines the impact of the recently developed investor sentiment index (Photo Pessimism) derived from a large sample of news photos on sustainable stock returns. Based on the quantile causality analysis, we demonstrate that Photo and Text Pessimism significantly influence S&P 500 ESG stock market returns, particularly at medium quantile levels. The findings also suggest that the Photo sentiment index is more accurate than the text-based index in predicting ESG returns. Leveraging visual sentiment indicators can improve ESG return forecasts and underscore the key role of visual information in sustainable finance decision-making.

Suggested Citation

  • Mokni, Khaled & Nammouri, Hela & Dhaoui, Chedia & Ben Jabeur, Sami, 2025. "Is a picture really worth a thousand words? Investigating the impact of investor sentiment on sustainable stocks," Finance Research Letters, Elsevier, vol. 81(C).
    • Handle: RePEc:eee:finlet:v:81:y:2025:i:c:s1544612325007792
    DOI: 10.1016/j.frl.2025.107520
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    Keywords

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    JEL classification:

    • G13 - Financial Economics - - General Financial Markets - - - Contingent Pricing; Futures Pricing
    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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