🤖 AI Summary
This study investigates whether and how media coverage related to biodiversity influences stock market performance in Europe. Drawing on GDELT global knowledge graph data from France, Germany, Italy, and Spain between 2015 and 2025, the authors construct a media-based biodiversity risk index and employ a panel Granger causality test alongside an augmented inverse probability weighting (AIPW) event study design, complemented by quantile robustness checks. The analysis provides the first empirical evidence that European equity valuations are significantly driven by biodiversity-related media narratives: negative sentiment depresses stock prices, with peak effects emerging three to ten months after the initial shock. Notably, the positive impact of low-risk events substantially outweighs the negative impact of high-risk events, revealing a pronounced asymmetry. These findings remain robust after controlling for market volatility and policy uncertainty.
📝 Abstract
This study constructs novel biodiversity related media risk indicators for France, Germany, Italy, and Spain over 2015-2025, capturing media attention to biodiversity threats using the GDELT Global Knowledge Graph. Using panel Granger causality tests and an augmented inverse probability weighting (AIPW) event-study design, we find highly significant evidence that biodiversity risk reduces stock prices, with effects peaking between 3 and 10 months after a shock. Moreover, we uncover a marked asymmetry whereby the positive effects of low biodiversity risk episodes outweigh the negative effects of high-risk episodes. Results are robust across quantiles of the return distribution and hold when controlling for European equity market volatility and economic policy uncertainty. Our findings provide the first evidence that biodiversity media narratives drive stock market valuations in Europe.