Do natural disasters affect stock price crash risk? Evidence from emerging markets

Rui Zhao, Dayong Zhang and Mengmeng Guo

Journal of International Financial Markets, Institutions and Money, 2024, vol. 93, issue C

Abstract: This study shows a significantly positive relationship between natural disasters and firm-level stock price crash risk using a sample of listed firms from emerging markets.The channel tests suggest that natural disasters affect crash risk by increasing corporate risk-taking, dampening firm fundamentals, and aggravating bad news hoarding. The research further identifies that the effect of natural disasters on crash risk is moderated by country-level and firm-level characteristics. Overall, our findings contribute to a broader understanding of the economic outcomes of natural disasters in emerging markets.

Keywords: Natural disasters; Stock price crash risk; Bad news hoarding; Emerging markets (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:intfin:v:93:y:2024:i:c:s1042443124000672

DOI: 10.1016/j.intfin.2024.102001

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