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The impact of wildfire smoke on carbon-intensive stocks

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  • Salikhova, Tatiana

Abstract

We show that carbon-intensive firms experienced significant negative cumulative abnormal returns when the historically unprecedented haze from Canadian wildfires reached the New York City area in June 2023. Our findings cannot be explained by energy price shocks, negative productivity effects of air pollution, aversion to highly polluting industries, or concurrent political events. Our results indicate that firsthand exposure to wildfire haze possibly altered the beliefs of non-institutional investors, leading them to discount carbon-intensive stocks.

Suggested Citation

  • Salikhova, Tatiana, 2025. "The impact of wildfire smoke on carbon-intensive stocks," Finance Research Letters, Elsevier, vol. 82(C).
    • Handle: RePEc:eee:finlet:v:82:y:2025:i:c:s1544612325008797
    DOI: 10.1016/j.frl.2025.107620
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    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G40 - Financial Economics - - Behavioral Finance - - - General
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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