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Revealing climate change opinions through investment behavior: Evidence from Fukushima
Institution:1. Leone Family Department of Energy and Mineral Engineering, Penn State University, USA;2. Naveen Jindal School of Management, University of Texas at Dallas, USA;1. University of Hamburg, Von-Melle-Park 5, 20146 Hamburg, Germany;2. Albertus-Magnus Platz 1, 50923 Cologne, Germany;1. Department of Economics and Statistics, University of Siena (I), Italy;2. Department of Economics, Monash University, Australia;1. School of Finance, Tianjin University of Finance and Economics, 300222, Tianjin, PR China;2. Business School, University of Hull, HU6 7RX, Hull, UK;3. Laboratory of Fintech and Risk Management, 300222, Tianjin, PR China;1. Department of Agricultural Economics, Sociology and Education, The Pennsylvania State University, Armsby Building, University Park, PA 16802 USA;2. Department of Economics, Monash Business School, Monash University, Clayton, Australia;1. Servicio Endovascular, Hospital Universitario Virgen Macarena, Sevilla, España;2. Servicio de Neurología, Hospital Universitario Virgen Macarena, Sevilla, España;3. Servicio de Radiología, Hospital Universitario Virgen Macarena, Sevilla, España;1. Department of International and European Studies, University of Macedonia, 156 Egnatia Str., Thessaloniki 540 06, Greece;2. School af Science and Technology, International Hellenic University, 14th km Thessaloniki/Moudamia, 57001 Thermi, Greece;3. Department of Earth and Environment, Center for Energy and Environmental Studies, 675 Commonwealth Avenue, Boston University, Boston, MA 02215, United States;4. Department of Economics, University of Macedonia, 156 Egnatia Str., Thessaloniki 540 06, Greece
Abstract:In this study we present a novel research approach to obtaining behavior-based evidence of regional climate change attitudes, using the 2011 Fukushima nuclear plant incident as a natural experiment. Our approach allows us to produce the first non-survey-based empirical evidence of a trans-Atlantic divide in public opinion on the environment and climate change that investors assign to fossil-based and renewable energy. This value is based on the perceived potential of these fuel types to substitute for nuclear generation in the aftermath of the Fukushima crisis. We carry out an event study to examine differences in abnormal returns of global coal and renewable energy companies on European and American stock exchanges. We find that investors trading on U.S. markets exhibit a significantly more favorable perception of coal stock profitability, while investors trading on European exchanges display a more favorable perception about profitability of renewable energy stocks.
Keywords:Climate change  Public opinion  Event study  Financial markets  Stock returns  Fukushima
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