Chinese Stock Market Performance and Natural Disasters

Whelsy Boungou, Melchisedek Joslem Ngambou Djatche and Nicholas Biekpe
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Whelsy Boungou: PSB - Paris School of Business - HESAM - HESAM Université - Communauté d'universités et d'établissements Hautes écoles Sorbonne Arts et métiers université
Melchisedek Joslem Ngambou Djatche: Faculté de Droit, Economie et Gestion de l’université d’Angers.
Nicholas Biekpe: University of Cape Town

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Abstract: In this article, we investigate the impact of natural disasters on Chinese stock market performance over the period from 2017 to 2023. Using monthly financial data from 2,117 Chinese companies and climate data relating to floods and storms, our results highlight a negative association between stock market returns and natural disasters. We observe that the recurrence of natural disasters reduces the stock market returns of Chinese companies. We also find that, whatever the intensity of the natural disaster (number of deaths and people affected) and the company's sector of activity, the observed effect is verified. Our results also show that firms' Environmental, Social, and Governance (ESG) performance influences their exposure to natural disasters. We find that firms with higher ESG scores perform better despite natural disasters than other firms. This article thus provides the first detailed evidence of Chinese firms' exposure to natural disasters. JEL Codes: G12, G32, Q40

Keywords: Natural disaster; stock market; ESG; China (search for similar items in EconPapers)
Date: 2025-02-27
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Published in Journal of Emerging Market Finance, 2025, ⟨10.1177/09726527251318132⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-05095168

DOI: 10.1177/09726527251318132

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