Climate anomalies and stock market dynamics: Evidence from empirical analysis.
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| Titel: | Climate anomalies and stock market dynamics: Evidence from empirical analysis. |
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| Autoren: | Akshaya A; School of Humanities, Social Sciences and Management, National Institute of Technology Karnataka, Surathkal, Mangalore, India. Electronic address: akshaypatali088@gmail.com., Gopalakrishna BV; School of Humanities, Social Sciences and Management, National Institute of Technology Karnataka, Surathkal, Mangalore, India. |
| Quelle: | Journal of environmental management [J Environ Manage] 2025 Dec; Vol. 395, pp. 127946. Date of Electronic Publication: 2025 Nov 18. |
| Publikationsart: | Journal Article |
| Sprache: | English |
| Info zur Zeitschrift: | Publisher: Academic Press Country of Publication: England NLM ID: 0401664 Publication Model: Print-Electronic Cited Medium: Internet ISSN: 1095-8630 (Electronic) Linking ISSN: 03014797 NLM ISO Abbreviation: J Environ Manage Subsets: MEDLINE |
| Imprint Name(s): | Original Publication: London ; New York, Academic Press. |
| MeSH-Schlagworte: | Climate Change* , Investments*, Temperature |
| Abstract: | Competing Interests: Declaration of Competing interest The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this article. The longstanding variation in average climate parameters, typically occurring over decades or longer, is known as climate change. The authors examine the impact of climate change anomalies, specifically the changes in temperature and precipitation, on the equity market. This empirical approach utilized monthly long-term time-series data from 1996 to 2024, comprising 348 observations. To test the empirical association between the variables, the study employed the autoregressive distributed lag (ARDL) and Nonlinear ARDL (NARDL) models. The findings of this analysis reveal a significant short-run symmetric effect of temperature changes on market volatility (β = 0.0004, p = 0.010). Increasing temperatures intensify market instability, suggesting that short-term climatic shocks amplify investor uncertainty and risk perception, and heighten market momentum. In contrast, increasing precipitation exhibits a long-term stabilizing effect (β = -8.91e-06, p = 0.032), indicating that higher rainfall helps mitigate market instability over time. The alternative explanatory data from the World Bank and the GARCH model results are robust to the primary outcome. The study's outcomes provide valuable insights for regulatory bodies' climate disclosure policies and highlight the importance of proactive hazard management, particularly for investors in emerging markets and vulnerable sectors that are more susceptible to climate-driven volatility. (Copyright © 2025 Elsevier Ltd. All rights reserved.) |
| Contributed Indexing: | Keywords: Anomalies; Climate change; Stock market; Volatility |
| Entry Date(s): | Date Created: 20251119 Date Completed: 20251203 Latest Revision: 20251203 |
| Update Code: | 20251203 |
| DOI: | 10.1016/j.jenvman.2025.127946 |
| PMID: | 41259981 |
| Datenbank: | MEDLINE |
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Nájsť tento článok vo Web of Science | Abstract: | Competing Interests: Declaration of Competing interest The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this article.<br />The longstanding variation in average climate parameters, typically occurring over decades or longer, is known as climate change. The authors examine the impact of climate change anomalies, specifically the changes in temperature and precipitation, on the equity market. This empirical approach utilized monthly long-term time-series data from 1996 to 2024, comprising 348 observations. To test the empirical association between the variables, the study employed the autoregressive distributed lag (ARDL) and Nonlinear ARDL (NARDL) models. The findings of this analysis reveal a significant short-run symmetric effect of temperature changes on market volatility (β = 0.0004, p = 0.010). Increasing temperatures intensify market instability, suggesting that short-term climatic shocks amplify investor uncertainty and risk perception, and heighten market momentum. In contrast, increasing precipitation exhibits a long-term stabilizing effect (β = -8.91e-06, p = 0.032), indicating that higher rainfall helps mitigate market instability over time. The alternative explanatory data from the World Bank and the GARCH model results are robust to the primary outcome. The study's outcomes provide valuable insights for regulatory bodies' climate disclosure policies and highlight the importance of proactive hazard management, particularly for investors in emerging markets and vulnerable sectors that are more susceptible to climate-driven volatility.<br /> (Copyright © 2025 Elsevier Ltd. All rights reserved.) |
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| ISSN: | 1095-8630 |
| DOI: | 10.1016/j.jenvman.2025.127946 |