Related papers: Quantifying firm-level risks from nature deteriora…
Global climate warming and air pollution pose severe threats to economic development and public safety, presenting significant challenges to sustainable development worldwide. Corporations, as key players in resource utilization and…
Managing a portfolio to a risk model can tilt the portfolio toward weaknesses of the model. As a result, the optimized portfolio acquires downside exposure to uncertainty in the model itself, what we call "second order risk." We propose a…
We introduce a neural network approach for assessing the risk of a portfolio of assets and liabilities over a given time period. This requires a conditional valuation of the portfolio given the state of the world at a later time, a problem…
Artificial intelligence (AI) is often presented as a key tool for addressing societal challenges, such as climate change. At the same time, AI's environmental footprint is expanding increasingly. This report describes the systemic…
Many empirical studies have shown that government quality is a key determinant of vulnerability to natural disasters. Protection against natural disasters can be a public good -- flood protection, for example -- or a natural monopoly --…
We theorize the financial health of a company and the risk of its default. A company is financially healthy as long as its equilibrium in the financial system is maintained, which depends on the cost attributable to the probability that…
Machine learning is traditionally studied at the model level: researchers measure and improve the accuracy, robustness, bias, efficiency, and other dimensions of specific models. In practice, the societal impact of machine learning is…
Humans are increasingly stressing ecosystems via habitat destruction, climate change and global population movements leading to the widespread loss of biodiversity and the disruption of key ecological services. Ecosystems characterized…
A risk analyst assesses potential financial losses based on multiple sources of information. Often, the assessment does not only depend on the specification of the loss random variable but also various economic scenarios. Motivated by this…
In recent years, the economic policy of privatization, which is defined as the transfer of property or responsibility from public sector to private sector, is one of the global phenomenon that increases use of markets to allocate resources.…
In the current era of worldwide stock market interdependencies, the global financial village has become increasingly vulnerable to systemic collapse. The recent global financial crisis has highlighted the necessity of understanding and…
Measuring the effectiveness of corporate environmental reports, it being highly qualitative and less regulated, is often considered as a daunting task. The task becomes more complex if comparisons are to be performed. This study is…
Along with the increasing frequency and severity of cyber incidents, understanding their economic implications is paramount. In this context, listed firms' reactions to cyber incidents are compelling to study since they (i) are a good proxy…
Software defects rediscovered by a large number of customers affect various stakeholders and may: 1) hint at gaps in a software manufacturer's Quality Assurance (QA) processes, 2) lead to an over-load of a software manufacturer's support…
The risk of extreme environmental events is of great importance for both the authorities and the insurance industry. This paper concerns risk measures in a spatial setting, in order to introduce the spatial features of damages stemming from…
The unfolding climate crisis is a physical manifestation of the damage that market economy, driven by the high intensity consumption of fossil fuels, has inflicted on the Earth System and on the stability conditions that were established by…
Crime can have a volatile impact on investments. Despite the potential importance of crime rates in investments, there are no indices dedicated to evaluating the financial impact of crime in the United States. As such, this paper presents…
The resilience of electric power grids is threatened by natural hazards. Climate-related hazards are becoming more frequent and intense due to climate change. Statistical analyses clearly demonstrate a rise in the number of incidents (power…
This article develops multiple novel climate risk measures (or variables) based on the television news coverage by Bloomberg, CNBC, and Fox Business, and examines how they affect the systematic and idiosyncratic risks of clean energy firms…
In the aftermath of the financial crisis, the growing literature on financial networks has widely documented the predictive power of topological characteristics (e.g. degree centrality measures) to explain the systemic impact or systemic…