Temperature Shocks and Industry Earnings News

By Jawad M. Addoum, David T. Ng, Ariel Ortiz-Bobea. Social Science Research Network, 2019

201 citations recorded by the source corpus.

Climate scientists project a rise in both average temperatures and the frequency of temperature extremes. We study how extreme temperatures affect companies' earnings across different industries and whether sell-side analysts understand these relationships. We combine granular daily data on temperatures across the continental U.S. with locations of public companies' establishments and build a panel of quarterly firm-level temperature exposures. Extreme temperatures significantly impact earnings in over 40% of industries, with bi-directional effects that harm some industries while others benefit. Analysts and investors do not immediately react to observable intra-quarter temperature shocks, but earnings forecasts account for temperature effects by quarter-end in many, though not all, industries.

Subfields: Economics and Econometrics, Finance, Soil Science

View Paper: https://www.semanticscholar.org/paper/66eb3a83525dde181fbf16e3196a0165f26f9d1c

Citations in the corpus

• Investor Rewards to Climate Responsibility: Stock-Price Responses to the Opposite Shocks of the 2016 and 2020 U.S. Elections (2021, unknown): “Recent studies include Addoum, Ng, and Ortiz-Bobea (2020, 2019), Andersson, Bolton, and Samama (2016), Baldauf, Garlappi, and Yannelis (2020), Bartram, Hou, and Kim (2019), Berkman, Jona, and Soderstrom (2019), Bernstein, Gustafson, and Lewis (2019), Bolton and Kacperczyk (2020a,b), Ceccarelli,…”