Worries about energy security and stock returns

Moretti, Angelo; Santi, Caterina

doi:10.1016/j.jebo.2025.107210

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Article (Scientific journals)

Worries about energy security and stock returns

Moretti, Angelo; Santi, Caterina

2025 • In Journal of Economic Behavior and Organization, 238, p. 107210

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https://hdl.handle.net/2268/335698

DOI
10.1016/j.jebo.2025.107210

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Keywords :

Public attitudes; Energy; Asset pricing; Europe

Abstract :

[en] This paper sheds light on how investors’ worries about energy security affect the returns of stocks with different levels of dependence on fossil energy. Using carbon emissions as a proxy for reliance on fossil energy, we contrast stock return behavior in energy-intensive (carbon-intensive) sectors versus sectors with lower exposure to fossil fuel risks in a cross-section of over 3,300 firms in 21 countries. To capture investor concerns, we construct a novel measure of worry about energy security using small area estimation applied to survey data. We find no significant return differences between high and low fossil-dependence firms when investor concerns about energy security are low. However, in markets with heightened concerns, firms with greater reliance on fossil fuels earn significantly higher returns, particularly in the medium to upper quantiles of the return distribution.

Disciplines :

Finance

Author, co-author :

Moretti, Angelo

Santi, Caterina ; Université de Liège - ULiège > HEC Liège Research > HEC Liège Research: Financial Management for the Future

Language :

English

Title :

Worries about energy security and stock returns

Publication date :

October 2025

Journal title :

Journal of Economic Behavior and Organization

ISSN :

0167-2681

eISSN :

1879-1751

Publisher :

Elsevier

Volume :

238

Pages :

107210

Peer reviewed :

Peer Reviewed verified by ORBi

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https://api.elsevier.com/content/article/PII:S0167268125003294?httpAccept=text/xml

Available on ORBi :

since 08 September 2025

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