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1Università Cattolica del Sacro Cuore, Italy; 2ETH Zurich, Switzerland; 3Singapore-ETH Centre, Switzerland; 4National University of Singapore, Singapore
Discussant: Thomas Schmid (University of Hong Kong)
We study the contribution of directors to firm resilience by assessing the relative importance of their advisory and monitoring roles at times of crisis. Based on manually collected US data, we document that four bord-related variables affect market reactions around disruptive events. Board independence and the presence of directors with industry expertise exacerbate the negative share price effect, whereas the converse is true for director busyness and board size. These reactions imply that, in times of crisis, advice-oriented boards fare better than monitoring-oriented boards.
The economic costs of climate change
Claudia Custodio2, Miguel Ferreira3, Emilia Garcia-Appendini1, Adrian Lam2
1University of Zurich, Switzerland; 2Imperial College Business School, United Kingdom; 3Nova School of Business and Economics, Portugal
Discussant: Emirhan Ilhan (Frankfurt School of Finance and Management)
We estimate the economic costs of climate change by exploiting production networks. Specifically, we estimate the impact of changes in local temperature by comparing sales of intermediate goods across suppliers located in different regions that are selling to the same client. We find that a 1°C increase in average daily temperature leads to a reduction in supplier sales of about 2%. The effect is more pronounced among suppliers in manufacturing and heat-sensitive industries, which is consistent with reduced labor supply when temperatures are higher. Financially constrained and small firms are more affected, which suggests that these firms have difficulties to adapt to changes in temperatures. We also find that episodes of extremely hot and cold weather lead to significantly stronger reductions in sales. Our results suggest that the supply-side effects of climate change are large.