Stock market response to food safety regulations

Mario Mazzocchi, Maddalena Ragona () and Melanie Fritz

European Review of Agricultural Economics, 2009, vol. 36, issue 4, 571-595

Abstract: Event studies (ESs) can be applied to evaluate the impact of new regulations on the value of listed firms. However, regulatory changes are preceded by consultation processes and anticipations to the shareholders, which make it difficult to determine the exact timing of stock price response and limit the potential of the analysis. We adopt a methodological extension to the ES approach which enables the detection of significant response under date uncertainty. The application measures the impact of European Commission Regulation 1881/2006 and the English Contaminants in Food Regulation 2007 on 30 food securities listed in the London Stock Exchange. Oxford University Press and Foundation for the European Review of Agricultural Economics 2009; all rights reserved. For permissions, please email journals.permissions@oxfordjournals.org, Oxford University Press.

Date: 2009
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