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The impact of climate policy uncertainty on the Italian financial market

Author

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  • Tommaso, Caterina Di
  • Foglia, Matteo
  • Pacelli, Vincenzo

Abstract

In this paper, we develop the Climate Policy Uncertainty Index (CPU) for the Italian context based on news from major Italian newspapers. The CPU index exhibits distinct movements around major national and international climate events. We also investigate the effects of CPU on the Italian financial market. The results provide evidence that a shock CPU has a negative impact on financial market performance.

Suggested Citation

  • Tommaso, Caterina Di & Foglia, Matteo & Pacelli, Vincenzo, 2024. "The impact of climate policy uncertainty on the Italian financial market," Finance Research Letters, Elsevier, vol. 69(PA).
    • Handle: RePEc:eee:finlet:v:69:y:2024:i:pa:s1544612324011243
    DOI: 10.1016/j.frl.2024.106094
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    More about this item

    Keywords

    Climate change; Uncertainty; Capital markets; Climate performance;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets

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