EconPapers    
Economics at your fingertips  
 

A Fortune from Misfortune: Evidence from Hog Firms' Stock Price Responses to China's African Swine Fever Outbreaks

Tao Xiong, Wendong Zhang () and Chen-Ti Chen

Center for Agricultural and Rural Development (CARD) Publications from Center for Agricultural and Rural Development (CARD) at Iowa State University

Abstract: China is the world's largest hog producer and a leading pork importer. Since August 2018, ongoing outbreaks of African Swine Fever (ASF), a highly contagious and deadly disease affecting pigs, have hit China's livestock industries and wiped out 40% of China's pigs. We leverage data on daily stock returns from 25 major publicly listed firms from China and eight major pork-exporting countries to provide the first systematic analysis of the firm-level economic impacts of the outbreaks. We find that, on average, announcements of ASF outbreaks have led to positive and significant stock returns for both Chinese and international hog firms. China's hog firms, on average, enjoyed 10%-40% cumulative abnormal returns during the 2019 Chinese Spring Festival, when investors saw signs of a near-20% inventory loss during a peak demand season for pork. We show that larger hog firms tend to capture greater positive stock returns. Our results suggest opportunities for consolidation, expansion, and upgrades of China's meat industry that have long-run implications for its global competitiveness and efficiency.

Date: 2021-08
New Economics Papers: this item is included in nep-cna and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed

Downloads: (external link)
https://www.card.iastate.edu/products/publications/pdf/20wp602.pdf Full Text (application/pdf)
https://www.card.iastate.edu/products/publications/synopsis/?p=1304 Online Synopsis (text/html)

Related works:
Journal Article: A Fortune from misfortune: Evidence from hog firms’ stock price responses to China’s African Swine Fever outbreaks (2021) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ias:cpaper:20-wp602

Access Statistics for this paper

More papers in Center for Agricultural and Rural Development (CARD) Publications from Center for Agricultural and Rural Development (CARD) at Iowa State University Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2022-08-20
Handle: RePEc:ias:cpaper:20-wp602