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Climate Sin Stocks: Stock Price Reactions to Global Climate Strikes

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Abstract

The First Global Climate Strike on March 15, 2019 has represented a historical turn in climate activism. We investigate the cross-section of European stock price reactions to this event. Looking at a large sample of European firms, we find that the unanticipated success of this event caused a substantial stock price reaction on high-carbon intensity companies. These findings are likely driven by an update of investors' beliefs about the level of environmental social norms in the economy and the anticipation of future developments of climate regulation.

Suggested Citation

  • Ramelli, Stefano & Ossola, Elisa & Rancan, Michela, 2020. "Climate Sin Stocks: Stock Price Reactions to Global Climate Strikes," Working Papers 2020-03, Joint Research Centre, European Commission (Ispra site).
  • Handle: RePEc:jrs:wpaper:202003
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    Cited by:

    1. Ľuboš Pástor & M Blair Vorsatz & Jeffrey Pontiff, 0. "Mutual Fund Performance and Flows during the COVID-19 Crisis," Review of Asset Pricing Studies, Oxford University Press, vol. 10(4), pages 791-833.
    2. Samson Mukanjari & Thomas Sterner, 2020. "Charting a “Green Path” for Recovery from COVID-19," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 76(4), pages 825-853, August.

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    More about this item

    Keywords

    climate risks; stock returns; event study; environmental preferences; sustainable finance; investor attention;
    All these keywords.

    JEL classification:

    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G40 - Financial Economics - - Behavioral Finance - - - General
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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