Impact of climate risk on airline stock price volatility

Zhendong Jin and Angxiu Cairang

Finance Research Letters, 2025, vol. 73, issue C

Abstract: This study examines the impact of climate risk on airline stock price volatility among China's listed airlines from 2012 to 2023. Utilizing a constructed climate risk index, we establish a significant positive link between climate risk and stock price volatility. The analysis shows that climate risk increases volatility through operating costs and media attention, especially during peak travel seasons. The study's innovative integration of financial market uncertainty and behavioral finance theories offers a comprehensive understanding of these dynamics. We end with actionable climate risk management advice for airlines and insights on sustainable aviation policy development.

Keywords: Climate risk; Stock price volatility; Operating costs; Media attention (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:73:y:2025:i:c:s1544612324016775

DOI: 10.1016/j.frl.2024.106648

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