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The role of biodiversity risk in stock price crashes

Author

Listed:
  • Liang, Chao
  • Yang, Jinyu
  • Shen, Lihua
  • Dong, Dayong

Abstract

This study examines whether and how firms’ biodiversity risk exposure affects future stock price crash risk. By analyzing data from US listed companies, we find a significant and positive association between biodiversity risk exposure and future crash risk. The additional analysis indicates that the biodiversity-related transition risks caused by regulations still significantly increase future crash risk, but management's sentiment toward biodiversity-related issues does not significantly affect future crash risk.

Suggested Citation

  • Liang, Chao & Yang, Jinyu & Shen, Lihua & Dong, Dayong, 2024. "The role of biodiversity risk in stock price crashes," Finance Research Letters, Elsevier, vol. 67(PA).
    • Handle: RePEc:eee:finlet:v:67:y:2024:i:pa:s1544612324008869
    DOI: 10.1016/j.frl.2024.105856
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    References listed on IDEAS

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    Cited by:

    1. Wei, Yu & Wang, Zhuo & Zhou, Xiaorui & Shang, Yue & Ren, Lin, 2024. "Are the leading indicators really leading? Evidence from mixed-frequency spillover approach," Finance Research Letters, Elsevier, vol. 69(PB).

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    More about this item

    Keywords

    Biodiversity risk exposure; Crash risk; Biodiversity-related transition risks; Management sentiment;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • C36 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Instrumental Variables (IV) Estimation
    • C58 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Financial Econometrics
    • C88 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Other Computer Software
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G4 - Financial Economics - - Behavioral Finance

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