Natural Disasters and Corporate Climate Change Policies
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Author/Creator
Author/Creator ORCID
Date
2018-01
Type of Work
Department
Finance & Economics
Program
Finance & Economics
Citation of Original Publication
Chen, D. (2018). Natural Disasters and Corporate Climate Change Policies. SSRN Electronic Journal. http://doi.org/10.2139/ssrn.3142989.
Rights
Public Domain Mark 1.0
Abstract
Using county-level data on severe meteorological events in the United States, I show that controlling for fixed firm and county effects, the annual number of natural disasters sustained at a county significantly improve the rating of the climate change policies of a firm headquartered in that county. I examine three hypotheses that may explain this result. The evidence supports the hypothesis that experiencing natural disasters enhances beliefs in anthropogenic global warming and motivates managers to take climate-friendly actions. Finally, employing the instrumental variable method and a quasi-natural experiment, I show that climate ratings do not significantly affect firm performance.