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Investor Attention to Fossil Fuel Divestment Movement and Stock Returns

Author

Listed:
  • Imane El Ouadghiri

    (PULV - Pôle Universitaire Léonard de Vinci, EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique)

  • Mathieu Gomes

    (CleRMa - Clermont Recherche Management - ESC Clermont-Ferrand - École Supérieure de Commerce (ESC) - Clermont-Ferrand - UCA - Université Clermont Auvergne)

  • Jonathan Peillex

    (LEFMI - Laboratoire d’Économie, Finance, Management et Innovation - UR UPJV 4286 - UPJV - Université de Picardie Jules Verne)

  • Guillaume Pijourlet

    (CleRMa - Clermont Recherche Management - ESC Clermont-Ferrand - École Supérieure de Commerce (ESC) - Clermont-Ferrand - UCA - Université Clermont Auvergne)

Abstract

This study investigates whether the investor attention to the fossil fuel divestment (FFD) movement is related to the stock returns on firms involved in extracting fossil fuels. Three complementary indicators of investor attention to the FFD movement are considered: (1) the U.S. weekly Google Search Volume Index on the topic "fossil fuel divestment," (2) the U.S. weekly media coverage of fossil fuel divestment, and (3) the number of weekly visits to the "fossil fuel divestment" page on Wikipedia. Based on a sample of weekly returns on 1,850 U.S. firms over the period 2012-2020, our econometric estimations report a positive relationship between investor attention to FFD and excess stock returns for U.S. fossil fuel-related firms. Therefore, contrary to what the FFD campaigners might expect, the stigmatization of the fossil fuel industry does not drive down the stock returns on fossil fuel-related firms.

Suggested Citation

  • Imane El Ouadghiri & Mathieu Gomes & Jonathan Peillex & Guillaume Pijourlet, 2022. "Investor Attention to Fossil Fuel Divestment Movement and Stock Returns," Post-Print hal-03969308, HAL.
    • Handle: RePEc:hal:journl:hal-03969308
    DOI: 10.5547/01956574.43.6.ioua
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    Cited by:

    1. Peillex, Jonathan, 2023. "Réaction des investisseurs à la création de fonds éthiques [Investor reaction to the creation of ethical funds]," MPRA Paper 118930, University Library of Munich, Germany.
    2. Abid, Ilyes & Benlemlih, Mohammed & El Ouadghiri, Imane & Peillex, Jonathan & Urom, Christian, 2023. "Fossil fuel divestment and energy prices: Implications for economic agents," Journal of Economic Behavior & Organization, Elsevier, vol. 214(C), pages 1-16.

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