How Does the Stock Market Respond to Chemical Disasters?

Marie-Aude Laguna () and Gunther Capelle-Blancard
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Marie-Aude Laguna: DRM - Dauphine Recherches en Management - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: In this paper, we examine the stock market reaction to industrial disasters. We consider an original sample of 64 explosions in chemical plants and refineries worldwide over the period 1990-2005. A quarter of the accidents resulted in a toxic release, and half of them caused at least one death or serious injury. On average, petrochemical firms in our sample experience a drop in their market value of 1.3% over the two days immediately following the disaster. Using multivariate analysis, we show that this loss is significantly related to the seriousness of the accident as measured by the number of casualties and by chemical pollution: each casualty corresponds to a loss of $164 million and a toxic release to a loss of $1 billion.

Keywords: Technological risk; Event study; Environmental liability; Disclosure; Insurance (search for similar items in EconPapers)
Date: 2010-03
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00637961v1
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Citations: View citations in EconPapers (85)

Published in Journal of Environmental Economics and Management, 2010, 59 (2), pp.192-205. ⟨10.1016/j.jeem.2009.11.002⟩

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Related works:
Journal Article: How does the stock market respond to chemical disasters? (2010)
Working Paper: How Does the Stock Market Respond to Chemical Disasters? (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:cesptp:halshs-00637961

DOI: 10.1016/j.jeem.2009.11.002

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