Construction of a climate risk index under the media attention perspective and its empirical test for financial market volatility

Abstract

Under the current economic situation, China’s economy is steadily moving from the stage of high-speed growth to that of high-quality development. while climate risks arising from global warming are receiving increasing media attention. Media attention has a profound impact on the perception and investment decisions of financial market participants. This paper constructs a climate risk index based on media attention and empirically investigates its relationship with stock volatility. It is found that the climate risk media index significantly affects stock volatility, which provides a theoretical basis for the regulation of financial asset price volatility. Through in-depth study of its influence mechanism, it can provide accurate decision support and risk management strategies for financial market stabilization.