When rain matters! Investments and value relevance

We study whether firms, whose operational performance is highly sensitive to rainfall conditions (rain-sensitive firms), follow differential investment strategies generate value in response diverse extreme conditions. Using Indian monsoon data, we find that rain-sensitive firms suffer a significant decline their market the immediate aftermath of excess and deficit Results show by depends on saliency While boost investments following rainfall, shrink rainfall. However, these alternative appear be effective as both groups affected experience positive growth values strategies. Our results indicate theory can bridge theoretical tensions between real-options risk-shifting theories resulting corporate behavior face two