Does climate change impact stock prices in the blue economy?
Abstract
This study examines the impact of climate change on the stock prices of firms in the blue economy, specifically French companies operating in ocean-linked sectors. Using climate variables and daily stock data from 1 January 2018 to 31 December 2023, the analysis explores short and long-term relationships between climate factors and stock performance employing Vector Auto-Regressive (VAR) and Autoregressive Distributed Lag (ARDL) models. Overall, for most firms, the findings did not reveal significant relationship between stock prices and climate fluctuations, implying that climate change variables may not be the primary drivers of the stock market performance. The impulse response functions and the variance decomposition analysis yield different results depending on the sector and activity of each company but further confirmed the lack of association. This research contributes to the academic discussions on climate risk by highlighting the resilience of blue economy firms and their capacity to maintain stable performance even in the face of climate-related uncertainties and external shocks.
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