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Article

Extreme Temperatures and Firm-Level Stock Returns

by and *
School of Management and Economics, University of Electronic Science and Technology of China, Chengdu 611731, China
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Author to whom correspondence should be addressed.
Academic Editor: Mustafa Younis
Int. J. Environ. Res. Public Health 2021, 18(4), 2004; https://doi.org/10.3390/ijerph18042004
Received: 10 January 2021 / Revised: 9 February 2021 / Accepted: 13 February 2021 / Published: 19 February 2021
(This article belongs to the Special Issue Global Health and Infection)
By linking stock returns with weather conditions from 2007 to 2019 in China, we study how firm-level stock returns react to extreme temperatures. Based on a multivariate ordinary least squares regression model with fixed effects, empirical results show that firm-level stock returns decrease with exposure to extreme temperatures. We further explore the heterogeneity in the temperature-return relation to enrich our understanding of the economic mechanism behind it. The impact of extreme temperatures on abnormal stock returns is more pronounced in smaller, younger, more volatile, less profitable firms and firms with more intangible assets. The results indicate that the investor mood likely plays a role in the extreme temperature effect. The impact of extreme temperatures holds after addressing a series of concerns. Overall, our paper provides additional firm-level evidence on the environment-induced mood effect in the stock market. View Full-Text
Keywords: extreme temperature; stock return; investor mood extreme temperature; stock return; investor mood
MDPI and ACS Style

He, J.; Ma, X. Extreme Temperatures and Firm-Level Stock Returns. Int. J. Environ. Res. Public Health 2021, 18, 2004. https://doi.org/10.3390/ijerph18042004

AMA Style

He J, Ma X. Extreme Temperatures and Firm-Level Stock Returns. International Journal of Environmental Research and Public Health. 2021; 18(4):2004. https://doi.org/10.3390/ijerph18042004

Chicago/Turabian Style

He, Jingbin, and Xinru Ma. 2021. "Extreme Temperatures and Firm-Level Stock Returns" International Journal of Environmental Research and Public Health 18, no. 4: 2004. https://doi.org/10.3390/ijerph18042004

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