Retail investors' activity and climate disasters

Author

Marinela Adriana FINTA, Singapore Management UniversityFollow

Publication Type

Working Paper

Version

publishedVersion

Publication Date

6-2024

Abstract

We analyze the effects of climate disasters on retail investors’ trading activity. Results show that retail investors trade significantly less during and around climate disasters, and retail buyers exhibit higher returns than sellers. Climate disasters weaken the positive return predictability of the past month’s order imbalances while strengthening it for the past six month’s order imbalances. In the short run, firms within climate disaster counties with retail net buying underperform those with negative imbalances. Instead, in the long run, firms within and outside climate disaster counties with positive order flows outperform those with negative order flows. Finally, the estimates on the return and order imbalance comovement around climate disasters are consistent with the main findings.

Keywords

Retail investors, climate disasters

Discipline

Business Law, Public Responsibility, and Ethics | Finance and Financial Management | Physical and Environmental Geography | Portfolio and Security Analysis

First Page

1

Last Page

60

Publisher

Singapore Management University, Sim Kee Boon Institute for Financial Economics

City or Country

Singapore

Embargo Period

6-12-2024

Citation

FINTA, Marinela Adriana. Retail investors' activity and climate disasters. (2024). 1-60.
Available at: https://ink.library.smu.edu.sg/skbi/44

Copyright Owner and License

SMU

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.