| dc.description.abstract | Empirical research on the influence of climate policy uncertainty (CPU) on
stock price crash risk, particularly within the banking industry, is sparse. By analyzing
data of 8,023 U.S banks spanning from 1987 to 2020, I find a positive correlation
between CPU and large-scale stock price declines, suggesting that increased CPU
heightens crash risk. Additional investigation finds that this relationship is particularly
significant for banks exhibiting high levels of risk-taking, corporate governance,
financial constraints, or sensitivity to CPU. Collectively, this work contributes valuable
insights to the literature on policy uncertainty and crash risk determinants. Additionally,
the findings offer market participants a deeper understanding of crash risk mechanisms
and the implications of policy uncertainty, aiding in risk management and investment
decision-making. | en_US |
