Air pollution and stock returns: Evidence from a natural experiment
Air pollution and stock returns: Evidence from a natural experiment
Previous studies have documented the existence of a relationship between air pollution and people's moods and between people's moods and stock returns. To investigate if the link between local air pollution and domestic equity returns is mediated by the trading floor community, we use the transition of Italy's main stock exchange from a trading floor technology to an electronic and delocalized trading system as a natural experiment. In addition, we take advantage of differences in trading technology across a sample of major international stock exchanges. In both instances, we document the existence of an air pollution effect only when trading is conducted on the floor, which provides evidence in support of the view that the air pollution effect is at least partly mediated by the behavior of the trading floor community.
25-42
Lepori, Gabriele
551865b7-2e3a-4de1-aaf9-6c7f23e32e8d
January 2016
Lepori, Gabriele
551865b7-2e3a-4de1-aaf9-6c7f23e32e8d
Lepori, Gabriele
(2016)
Air pollution and stock returns: Evidence from a natural experiment.
Journal of Empirical Finance, 35, .
(doi:10.1016/j.jempfin.2015.10.008).
Abstract
Previous studies have documented the existence of a relationship between air pollution and people's moods and between people's moods and stock returns. To investigate if the link between local air pollution and domestic equity returns is mediated by the trading floor community, we use the transition of Italy's main stock exchange from a trading floor technology to an electronic and delocalized trading system as a natural experiment. In addition, we take advantage of differences in trading technology across a sample of major international stock exchanges. In both instances, we document the existence of an air pollution effect only when trading is conducted on the floor, which provides evidence in support of the view that the air pollution effect is at least partly mediated by the behavior of the trading floor community.
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Accepted/In Press date: 15 October 2015
e-pub ahead of print date: 24 October 2015
Published date: January 2016
Identifiers
Local EPrints ID: 434589
URI: http://eprints.soton.ac.uk/id/eprint/434589
ISSN: 0927-5398
PURE UUID: 0dfc6778-4eaa-4bda-9be6-699627f764e1
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Date deposited: 02 Oct 2019 16:30
Last modified: 16 Mar 2024 04:41
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