Stock market response to potash mine disasters

Oskar Kowalewksi () and Piotr Śpiewanowski
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Oskar Kowalewksi: IESEG School of Management (LEM-CNRS-UMR 9221)
Authors registered in the RePEc Author Service: Oskar Kowalewski ()

No 2017-ACF-02, Working Papers from IESEG School of Management

Abstract: We examine the stock market reaction to natural and man-made disasters in potash mines. We use a sample of 44 mining accidents worldwide over the period 1995-2016. A quarter of the accidents were the result of a natural disaster, such as flooding, that often ended in the closure of the potash mine. The remaining accidents were caused mainly by human error, and almost 50% were work accidents often associated with serious injury or death. On average, mining firms experience a drop in their market value of 0.89% on the day of a disaster. However, we observe a significantly stronger response of the stock market to natural events. Indeed, the regression analysis confirms that the firm’s market loss is significantly related to the seriousness of the accident. On the other hand, we do not find any other micro- or macro-level factors that determine the stock market reaction following a disaster.

Keywords: potash mine; disasters; event study; working accident; catastrophe (search for similar items in EconPapers)
JEL-codes: G14 Q27 Q51 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2017-03
New Economics Papers: this item is included in nep-fmk
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Related works:
Journal Article: Stock market response to potash mine disasters (2020)
Working Paper: Stock market response to potash mine disasters (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:ies:wpaper:f201702

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