Review of Corporate Finance > Vol 4 > Issue 1–2

Climate Change Fear: Natural Disasters and Investor Behavior

Franco Fiordelisi, Essex Business School, University of Essex, UK, , Giuseppe Galloppo, Department of Economics and Business, University of Viterbo La Tuscia, Italy, , Viktoriia Paimanova, Departmental Faculty of Engineering, Campus Bio-Medico University of Rome, Italy,
Suggested Citation
Franco Fiordelisi, Giuseppe Galloppo and Viktoriia Paimanova (2024), "Climate Change Fear: Natural Disasters and Investor Behavior", Review of Corporate Finance: Vol. 4: No. 1–2, pp 17-45.

Publication Date: 18 Apr 2024
© 2024 F. Fiordelisi, G. Galloppo and V. Paimanova
Environmental economics,  Econometric models,  Financial markets,  Strategic management,  Behavioral strategy,  Stakeholder strategy,  Performance measurement,  Environmental politics
JEL Codes: G11, G12, G18
Sustainable investmentsclimate changenatural disastersETF


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In this article:
Introduction and Motivation 
Literature and Hypotheses Development 
Data and Variables 
Identification Strategy 
Empirical Results 
Additional Test 


Although an increasing number of papers analyze losses due to natural disasters, there is no evidence that climate change events have an impact on Sustainable Investment Decisions. Our paper proves, by using data on natural disasters, that these natural disasters have a substantial influence on the returns of Exchange-traded Funds (ETF), showing that investors react to natural disasters by investing in sustainable financial products. Our findings suggest that large-scale natural disasters significantly increase investors’ preferences for sustainable ETFs. Finally, we also provide evidence that investors’ sentiment toward the sustainability theme has changed over time.



Review of Corporate Finance, Volume 4, Issue 1–2 Special Issue on Sustainable and Climate Finance: Articles Overiew
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