Publication:
Effects of extreme temperature on the European equity market

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URI: https://hdl.handle.net/10016/37973
ISSN: 2387-0303
UXXI: DT/0000002085
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ws202309.pdf (1.6 MB)
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2023-07-24
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Abstract
The increasing frequency and severity of extreme temperatures are potential threats to financial stability. Indeed, physical risk related to these extreme phenomena can affect the whole financial system and, in particular, the equity market. In this study,we analyze the impact of extreme temperature exposure on firms' performance in Europe over the XXI century. We show that extreme temperatures can affect firms' profitability depending on their industry and the quarter of the year. Our results are of interest for both investors operating in the equity market and for regulators in charge of securing financial stability.
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Climate Change, Equity Market, Firm Performance, Physical Risk, Temperatures
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DES - Working Papers. Statistics and Econometrics. WS