Retail Investors' Activity and Climate Disasters

59 Pages Posted: 7 Dec 2022 Last revised: 3 May 2024

Date Written: September 1, 2022


We analyze the effects of climate disasters on retail investors’ trading activity. Results show that
retail investors trade significantly less during and around climate disasters, and retail buyers exhibit higher returns than sellers. Climate disasters weaken the positive return predictability of the past month’s order imbalances while strengthening it for the past six months. In the short run, firms within climate disaster counties with retail net buying underperform those with negative imbalances. Instead, in the long run, firms within and outside climate disaster counties with positive order flows outperform those with negative order flows. Finally, the estimates on the return and order imbalance comovement around climate disasters are consistent with the main findings.

Keywords: Retail Investors, Climate Disasters

JEL Classification: G11, G12, G14, G41, Q54

Suggested Citation

Finta, Marinela Adriana, Retail Investors' Activity and Climate Disasters (September 1, 2022). Available at SSRN: or

Marinela Adriana Finta (Contact Author)

Singapore Management University ( email )

50 Stamford Road
Singapore, 178899

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