How does air pollution-induced fund-manager mood affect stock markets in China?

Qinqin Wu, Robin K. Chou and Jing Lu

Journal of Behavioral and Experimental Finance, 2020, vol. 28, issue C

Abstract: We explore how the moods of open-end fund managers affect stock returns and trading activities. We construct a firm-level measure of fund-manager mood induced by local air pollution. We find that a depressed fund-manager mood significantly decreases the contemporaneous stock returns and liquidity. These results hold in a series of robustness checks. Further, we find that the effects of fund-manager mood on stock returns are more pronounced for firms that are difficult to arbitrage. This study shows another potential channel through which air pollution might impact financial markets.

Keywords: Air pollution; Investor mood; Fund manager; Stock market (search for similar items in EconPapers)
JEL-codes: G02 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:beexfi:v:28:y:2020:i:c:s2214635020303269

DOI: 10.1016/j.jbef.2020.100399

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