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Investor Attention to the Fossil Fuel Divestment Movement and Stock Returns

Imane Ouadghiri, Mathieu Gomes (), Jonathan Peillex () and Guillaume Pijourlet
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Mathieu Gomes: CleRMa - Clermont Recherche Management - ESC Clermont-Ferrand - École Supérieure de Commerce (ESC) - Clermont-Ferrand - UCA [2017-2020] - Université Clermont Auvergne [2017-2020]

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Abstract: This study investigates whether investor attention to the fossil fuel divestment (FFD) movement is related to the stock returns of firms involved in extracting fossil fuels. We consider three complementary indicators of investor attention to the FFD movement: (1) the US weekly Google Search Volume Index on the topic "fossil fuel divestment," (2) the US weekly media coverage of fossil fuel divestment, and (3) the number of weekly visits to the "fossil fuel divestment" page on Wikipedia. Based on a sample of weekly returns on 1,850 US firms over the period 2012-2020, our econometric estimations report a positive relationship between investor attention to FFD and excess stock returns for US fossil fuel-related firms. Therefore, contrary to what the FFD campaigners might expect, the stigmatization of the fossil fuel industry does not drive down the stock returns on fossil fuel-related firms.

Keywords: fossil fuel divestment; stock returns; investor attention; fossil fuel-related firms (search for similar items in EconPapers)
Date: 2022-01-29
New Economics Papers: this item is included in nep-cwa, nep-ene, nep-fmk and nep-rmg
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Published in The Energy Journal, 2022, 43 (6)

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