Climate change and financial stability: Natural disaster impacts on global stock markets

Pagnottoni, Paolo; Spelta, Alessandro; Flori, Andrea; Pammolli, Fabio

doi:10.1016/j.physa.2022.127514

Cited by 50 publications

(17 citation statements)

References 61 publications

(33 reference statements)

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“…Furthermore, the analysis of the chosen literature reveals that the majority of earlier studies were carried out in developed nations, specifically the US and Europe [11,14,16,18,19,20,26,28,30]. Despite numerous studies on global stock markets (for example, [12,17,21]), more research on the impact of climate change on developing countries is needed. Therefore, future studies can concentrate on the impact of the climate risk factor on developing countries since the predicted economic damages from climate change are estimated, with projected economic damages per capita for developing countries generally higher as a fraction of income [35].…”

Section: Resultsmentioning

confidence: 99%

“…Climate change risk factors may be proxied by a series of climate-related catastrophes. By using four different types of climate catastrophes, i.e, biological, climatological, geophysical, hydrological, and meteorological disasters that happened in 104 countries across the world on 27 global stock market indices from February 8, 2001, to December 31, 2019, Pagnottoni et al [12] showed that stock markets react differently to environmental hazard shocks depending on the type of event being studied as well as the location where the event happened. International financial markets react differently to biological and climatological calamities.…”

Section: Literature Reviewmentioning

confidence: 99%

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Climate change and stock market: a review

Tay

2023

IOP Conf. Ser.: Earth Environ. Sci.

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Climate change-related events are having a growing impact on the economy and financial markets. However, it is still difficult to quantify how climate change affects the financial system. The purpose of this research is to provide an overview of the relationship between climate risk factors and the stock market. The review focuses on the regions and methodologies used based on the selected publications for the past five years. The results revealed that most studies focused on developed economies, like those in the US and Europe, and adopted time series and panel regression in the analysis. The findings imply that future studies may focus on a wider range of issues, including developing countries and more advanced techniques in the analysis. The study also showed that, based on the evidence currently available, little is known about how investors assess climate threats; hence, a future study may close this knowledge gap. However, since this research reviewed the selected studies for the last five years, it has several limitations. A comprehensive investigation is needed, especially regarding the potential impacts of the pandemic on the environment and how it could spread to the stock market.

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Section: Resultsmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Climate change and stock market: a review

Tay

2023

IOP Conf. Ser.: Earth Environ. Sci.

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“…e selection of sub-markets for the inter-provincial financial market development level mainly focuses on the first three markets, but it should be noted that the money market belongs to the ranks of the short-term market, while the bond and equity markets belong to the medium-and longterm market. erefore, it is more appropriate to study the money market from the perspective of the lending market, i.e., it is more feasible to consider the impact of the mediumand long-term interest rate market changes on the financial market development [14]. At the level of indicator selection, existing studies do not construct a complete indicator system for financial market measurement and are not uniform at the level of market selection and indicator selection, and there are fewer relevant studies on regional differences in interprovincial financial market development, so this study will measure the level of inter-provincial financial market development and further analyze the regional differences.…”

Section: Research Backgroundmentioning

confidence: 99%

Financial Time Series Model Based on Least Squares Support Vector Machine Predictive Control Algorithm in Financial Market

2022

Mathematical Problems in Engineering

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China’s financial market also faces some outstanding problems, namely, obvious structural imbalance in the size of the financial market, on the one hand, the absolute dominance of the size of the indirect financing market, mainly the bank lending market and on the other hand, the imbalance in the size of the direct financing market and the indirect financing market. At the same time, there is also a structural imbalance of the financial market among regions in China. How to verify the objective existence of such structural imbalance in different regions and measure the difference in the level of financial market development among regions is the focus of this paper. This paper constructs a financial market development level indicator system from three dimensions, equity market, bond market, and lending market, and measures the financial market development level by using inter-provincial panel data from 2001 to 2020 through neural network algorithm, time series model, and support vector machine algorithm, and analyzes the regional heterogeneity of financial market development on this basis. The results show that the overall market level of the financial industry in the eastern coastal region of China is the highest, but the intra-regional differences are also the most obvious; the overall market level of the financial industry in the northeastern region of China is the lowest, and the differences with the eastern region rise significantly; the market level of the financial industry at the provincial level in the central and eastern regions shows an all-time decreasing trend, while the western and northeastern regions of China show a convergence, then divergence, and then convergence trend. Therefore, differentiated financial policies should be implemented according to the stage of regional development in order to enhance the financial development level of each economic region and gradually narrow the regional financial development gap.

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“…2021 ), climate-related natural disasters (Pagnottoni et al. 2022 ), or human-related disaster such as the Russian–Ukrainian war (Umar et al. 2022 ), which alter shock propagation mechanisms in financial markets and real economies to different extents (Spelta et al.…”

Section: Introductionmentioning

confidence: 99%

Wasserstein barycenter regression for estimating the joint dynamics of renewable and fossil fuel energy indices

Giuli

Spelta

2023

Comput Manag Sci

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In order to characterize non-linear system dynamics and to generate term structures of joint distributions, we propose a flexible and multidimensional approach, which exploits Wasserstein barycentric coordinates for histograms. We apply this methodology to study the relationships between the performance in the European market of the renewable energy sector and that of the fossil fuel energy one. Our methodology allows us to estimate the term structure of conditional joint distributions. This optimal barycentric interpolation can be interpreted as a posterior version of the joint distribution with respect to the prior contained in the past histograms history. Once the underlying dynamics mechanism among the set of variables are obtained as optimal Wasserstein barycentric coordinates, the learned dynamic rules can be used to generate term structures of joint distributions.

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Climate change and financial stability: Natural disaster impacts on global stock markets

Cited by 50 publications

References 61 publications

Climate change and stock market: a review

Climate change and stock market: a review

Financial Time Series Model Based on Least Squares Support Vector Machine Predictive Control Algorithm in Financial Market

Wasserstein barycenter regression for estimating the joint dynamics of renewable and fossil fuel energy indices

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