Green Attention in Financial Markets: A Global Warning

Marie Bessec and Julien Fouquau

Annals of Economics and Statistics, 2022, issue 148, 29-64

Abstract: We use textual analysis to measure the growing concern about environmental issues and to assess its impact on stock prices in the United States. Using a dataset of 71,785 articles published in The Wall Street Journal from 2010 to 2019, we create several scores capturing media coverage of environmental news and investigate their influence on US stocks. The best score overweights the news published on the front page of the newspaper and unusual environmental words in the corpus. We find a significant impact of the score on the stock returns of more than one third of firms in the sectors exposed to environmental risks. The impact is negative (positive) in the most (least) polluting sectors. The results are robust to the use of alternative lexicons and weighting schemes, various specifications and sample periods.

Keywords: Environmental Finance; Climate Change; Investor Sentiment; Media Coverage; Textual Analysis (search for similar items in EconPapers)
JEL-codes: G12 G41 Q54 Q57 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:adr:anecst:y:2022:i:148:p:29-64

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