The impact of wildfire smoke on carbon-intensive stocks

Tatiana Salikhova

Finance Research Letters, 2025, vol. 82, issue C

Abstract: We show that carbon-intensive firms experienced significant negative cumulative abnormal returns when the historically unprecedented haze from Canadian wildfires reached the New York City area in June 2023. Our findings cannot be explained by energy price shocks, negative productivity effects of air pollution, aversion to highly polluting industries, or concurrent political events. Our results indicate that firsthand exposure to wildfire haze possibly altered the beliefs of non-institutional investors, leading them to discount carbon-intensive stocks.

Keywords: Climate change; Stock returns; Brown stocks; Wildfires (search for similar items in EconPapers)
JEL-codes: G14 G23 G40 Q54 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:82:y:2025:i:c:s1544612325008797

DOI: 10.1016/j.frl.2025.107620

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