Is a picture really worth a thousand words? Investigating the impact of investor sentiment on sustainable stocks

Khaled Mokni, Hela Nammouri, Chedia Dhaoui and Sami Ben Jabeur

Finance Research Letters, 2025, vol. 81, issue C

Abstract: This paper examines the impact of the recently developed investor sentiment index (Photo Pessimism) derived from a large sample of news photos on sustainable stock returns. Based on the quantile causality analysis, we demonstrate that Photo and Text Pessimism significantly influence S&P 500 ESG stock market returns, particularly at medium quantile levels. The findings also suggest that the Photo sentiment index is more accurate than the text-based index in predicting ESG returns. Leveraging visual sentiment indicators can improve ESG return forecasts and underscore the key role of visual information in sustainable finance decision-making.

Keywords: Sustainable stocks; Investor sentiment; Photo sentiment; Return prediction (search for similar items in EconPapers)
JEL-codes: G13 G17 Q56 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:81:y:2025:i:c:s1544612325007792

DOI: 10.1016/j.frl.2025.107520

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