There are concerns that climate-related physical and political risks are not yet properly reflected in asset prices. To address these concerns, we develop a dynamic asset pricing framework with rare disasters related to climate change. The novelty of this paper lies in linking carbon emissions...

We investigate the uncertainty dynamics surrounding extreme weather events through the lens of option and stock markets by identifying market responses to the uncertainty regarding both potential hurricane landfall and subsequent economic impact. Stock options on firms with establishments...

Using unbalanced panel data on 3326 Chinese listed companies from 2014 to 2021, this study investigates the impact of corporate environmental performance on China's excess stock returns. The results show that stocks of companies with better environmental performance earn signifcantly higher...

This paper studies the interplay between environmental performance and financial valuation of firms in Latin America and the Caribbean. We provide insights into how environmental considerations are integrated into financial decision-making and investor behavior by analyzing the stock market...

There are long-standing debates in the financial economics literature regarding long-run risks, return seasonality, the impact of weather and the impact of climate. By disentangling the data into different frequencies this paper contributes several results to these topics. I find significant...