Long-term institutional investors and climate change news Beta

Ashrafee Hossain, Abdullah-Al Masum and Ramzi Benkraiem

Journal of Corporate Finance, 2024, vol. 89, issue C

Abstract: We predict and confirm that long-term institutional investors (LTIOs) play an important role in mitigating the negative market perceptions of US stocks following mainstream print media coverage of climate change. We observe a stronger effect of LTIOs for companies that lack corporate social responsibility and have less diverse and more co-opted boards. Overall, these findings indicate that the US equity market views LTIOs as effective monitors who can help guide companies facing climate risks toward a more sustainable trajectory.

Keywords: Climate change news beta; Long-term institutional investors; Monitoring (search for similar items in EconPapers)
JEL-codes: G11 G23 G30 Q54 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:89:y:2024:i:c:s092911992400155x

DOI: 10.1016/j.jcorpfin.2024.102693

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