Does carbon price uncertainty affect stock price crash risk? Evidence from China
Publication date
2023-06Keyword
Carbon price uncertaintyStock price crash risk
Information asymmetry
Investors' heterogeneity
Bad news hoarding
Rights
© 2023 Elsevier. Reproduced in accordance with the publisher's self-archiving policy. This manuscript version is made available under the CC-BY-NC-ND 4.0 license.Peer-Reviewed
YesOpen Access status
embargoedAccessAccepted for publication
14/04/2023
Metadata
Show full item recordAbstract
This study examines the effect of carbon price uncertainty on stock price crash risk. Utilizing the dynamic panel model on the data of Chinese listed firms from 2011 to 2018, we find that high carbon price uncertainty increases stock price crash risk. The impact of carbon price uncertainty is more prominent in the heavily polluting industries and during the post-period of the Paris agreement. The two underlying channels through which carbon price uncertainty induces stock price crashes are managers' hoarding of bad news and investors' heterogeneity. Furthermore, reducing information asymmetry inside and outside the firms can mitigate the influence of carbon price uncertainty on stock price crash risk. Our findings demonstrate that carbon price uncertainty as a newly underexplored factor induced by the prevailing curb of catastrophe risks has unintended but important implications on stock prices.Version
Accepted manuscriptCitation
Ren X, Zhong Y, Cheng X et al (2023) Does carbon price uncertainty affect stock price crash risk? Evidence from China. Energy Economics. 122:106689.Link to Version of Record
https://doi.org/10.1016/j.eneco.2023.106689Type
ArticleNotes
The full-text of this article will be released for public view at the end of the publisher embargo on 24th Oct 2024.ae974a485f413a2113503eed53cd6c53
https://doi.org/10.1016/j.eneco.2023.106689