 Input uncertainty and firm performance: evidence from critical mineralsViet Nguyen-Tien CEP Discussion Papers from Centre for Economic Performance, LSE Abstract: We study the effect of input uncertainty about critical minerals on firm performance, separating the second-moment risk channel from first-moment mineral sentiment and from general firm-level uncertainty. Using earnings-call transcripts matched to financial data for more than 14,000 publicly listed firms in 92 countries (2010-2022), we construct text-based measures of perceived critical-mineral risk. Higher perceived risk is robustly associated with lower revenue growth among downstream non-mining firms, consistent with risk-averse firms contracting output under input uncertainty. A one-standard-deviation increase in mineral risk is associated with 0.71 percentage points lower revenue growth for the average non-mining firm, rising to roughly 1.9 percentage points for smaller firms, and is concentrated in thinly traded minerals (lithium, cobalt, rare earths) rather than deeply traded ones (copper, nickel). Firms discuss hedging an stockpiling in response to price volatility rather than price levels, revealing the risk aversion that underlies the output contraction. These findings highlight a new uncertainty channel in the green transition relevant to strategic stockpiling and price transparency. Keywords: critical minerals; green transition; risk; exposure; sentiment; stockpiling; hedging (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:cep:cepdps:dp2197 Access Statistics for this paper More papers in CEP Discussion Papers from Centre for Economic Performance, LSE |
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