No abstract

In the last few decades, the frequency and intensity of extreme weather events have increased in many parts of the world, including Canada, as a result of global warming. Climate warming in Canada is about double the magnitude of global warming; therefore, the effects of weather catastrophes are expected to be higher in Canada compared to other economies. This study explores the impact of weather catastrophes on the Canadian stock market over the period 1988-2016. A mix of accounting ratios and statistical tests is used to estimate the effects of the extreme weather events on the Toronto Stock Exchange (TSX) composite and its subsector indices. A significant negative effect of the weather catastrophes on stock market returns and volatility is noticed a day after the extreme weather events. This effect is widespread in all sub-sectors of the market; IT and financial services sectors are the most impacted, while the consumer staples sector is the least. It is concluded that the impact of climate warming in Canada is higher and more widespread compared to other economies.

PurposeIn the last few decades, the frequency and intensity of extreme weather events have increased in most parts of the world including Canada because of global warming. The global warming in Canada is about double the magnitude of global warming; therefore, policymakers are concerned about the potential significant impact of the weather catastrophes on the economy and financial sector. The purpose of this study is to explore the impact of weather catastrophes on the Canadian banking sector.Design/methodology/approachUsing a sample of banking firms from Canada over the period 1988–2019, the present study estimates different econometric techniques to investigate the impact of weather catastrophes on the risk and performance of Canadian banks.FindingsAnalyses of the study do not find a significant impact of the weather catastrophes on the performance of the Canadian banks; however, it has helped banks to lower their risk level and improve stability due to proactive risk management. The findings of this study are not consistent with concerns of the policymakers about climate risk to the Canadian bank sector. More sector-specific research and policy initiatives are recommended to minimize the future financial risk of the increased frequency and intensity of natural disasters.Originality/valueThe study contributes to support the notion that the climate risk of banks is protected with insurance and reconstruction activities provide more banking opportunities.

Foreign direct investment (FDI) is a very important factor for economic growth because of its associated benefits such as advanced technology, employment, and economic development for the developing host countries. The factors of lower corporate tax rate, social peace, consistent energy supply, better infrastructure, skilled labor, political stability and business openness are very important for foreign investors. Therefore, this study investigates the impact of corporate tax reduction, terrorism, energy shortfall, availability of labor, infrastructure and degree of business openness on the FDI in Pakistan. Further, it compares democratic and autocratic regimes to evaluate their impact on attracting FDI in Pakistan. A vector error correction (VEC) model is used on the secondary data of the period 1989-2016. The results of the study show that corporate tax rate, terrorism, and energy shortfall have significant negative impact on FDI. The study results also confirm that autocratic period was more favorable to attract FDI providing openness to the economy when compared to democratic period. The findings of this study could be used by policy makers for future FDI policy of Pakistan.