PhD defence Flavio De Carolis

Keywords: Extreme weather events, Corporate Resilience, Market segmentation, Information advantage

"Let’s Get Physical: How floods and storms affect asset prices and capital structures"

This PhD thesis studies how extreme weather events such as floods and storms affect companies and financial markets in Europe. It shows that climate change not only damages physical assets but also disrupts financial stability through uncertainty and uneven access to information. The thesis consists of three main studies. The first examines how local investors, who are geographically closer to affected companies, use their local knowledge to reduce financial losses after disasters. The second explores how European institutional investors react to U.S. hurricanes, showing that distance and regulation shape how quickly and accurately they respond. The third analyzes how small and medium-sized enterprises recover from floods, highlighting that moderate debt levels and longer-term financing make firms more resilient. Overall, the thesis shows that while climate risks are global, their financial impacts depend heavily on local information, financial structure, and institutional context.

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