Impact of Extreme Climate Events on Chinese Stock Market: Event Study of Typhoons

As climate change continues to intensify, it has become increasingly important to assess the impact of extreme weather events on financial markets. This study examines the impact of typhoon landfalls on China's A-share market from 2014 to 2023. The study employs event study methodology, Carhart's four-factor model, and intervention analysis to examine and assess abnormal returns during five major typhoons in key sectors: Hato, Higos, Doksuri, Rammasun, and Maria. The findings suggest that typhoons can have a short-term negative impact on stock market performance, causing temporary market volatility, but the Chinese stock market recover quickly after a typhoon, thus mitigating the long-term financial consequences. These results highlight the resilience of the A-share market and provide valuable insights into how investors and policymakers can better manage the risks associated with climate-related disruptions.