Airline industry equities under external uncertainty shocks

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Authors

BLAMPIED Nicolás MAHADEO Scott Mark Romeo

Year of publication 2024
Type Article in Periodical
Magazine / Source ECONOMICS LETTERS
MU Faculty or unit

Faculty of Economics and Administration

Citation
Web https://www.sciencedirect.com/science/article/pii/S0165176524004786
Doi http://dx.doi.org/10.1016/j.econlet.2024.111994
Keywords Airline industry - Equity market - External shocks - Uncertainty
Description We gauge the impact of news and other relevant external uncertainties facing airline firms via an equity market lens. Using local projections, we establish that rising investors’ fear shocks have long-lasting negative effects on airline industry equity returns, while increasing geopolitical, climate policy, and fuel cost uncertainties have comparatively short-lived impacts. Our results are robust to several alternative model specifications, including a pre-pandemic subsample. Based on our findings, we provide a promising avenue for future research in airline financial management.
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