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How Policy Changes Affect Shareholder Wealth: The Case of the Fukushima Daiichi Nuclear Disaster

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Author Info

  • André Betzer

    (University of Wuppertal)

  • Markus Doumet

    (University of Mannheim)

  • Ulf Rinne

    (IZA)

Abstract

This paper analyzes how policy changes affect shareholder wealth in the context of environmental regulation. We exploit the unique and unexpected German reaction to the Fukushima Daiichi nuclear disaster, which involved the immediate shutdown of almost half of Germany’s nuclear reactors while safety checks were carried out, and a three-month moratorium on extending the lives of others. Using the event study methodology, our findings indicate a wealth transfer from nuclear energy companies to renewable energies companies in Germany. We moreover find that the joint market capitalization of these firms has decreased, but the amount of this combined decrease is small. Substantial heterogeneity in the shareholder wealth effects across European countries can be linked to different nuclear energy policies. The shareholder wealth of nuclear and conventional energy companies in the United States has been unaffected.

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Bibliographic Info

Paper provided by Universitätsbibliothek Wuppertal, University Library in its series Schumpeter Discussion Papers with number sdp11011.

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Length: 33
Date of creation: Jul 2011
Date of revision:
Handle: RePEc:bwu:schdps:sdp11011

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Web page: http://elpub.bib.uni-wuppertal.de

Related research

Keywords: Electric Power; Nuclear Power; Green Economy; Earthquake; Tsunami; Event Study; Environment;

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References

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Citations

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Cited by:
  1. Martin Bohl & Philipp Kaufmann & Patrick Stephan, 2012. "From Hero to Zero: Evidence of Performance Reversal and Speculative Bubbles in German Renewable Energy Stocks," CQE Working Papers 2412, Center for Quantitative Economics (CQE), University of Muenster.
  2. Grossi, Luigi & Waterson, Michael, 2013. "German Energy Market Fallout from the Japanese Earthquake," CAGE Online Working Paper Series 157, Competitive Advantage in the Global Economy (CAGE).
  3. Bohl, Martin T. & Kaufmann, Philipp & Stephan, Patrick M., 2013. "From hero to zero: Evidence of performance reversal and speculative bubbles in German renewable energy stocks," Energy Economics, Elsevier, vol. 37(C), pages 40-51.
  4. repec:cge:warwcg:156 is not listed on IDEAS
  5. Grossi, Luigi & Heim, Sven & Waterson, Michael, 2014. "A vision of the European energy future? The impact of the German response to the Fukushima earthquake," The Warwick Economics Research Paper Series (TWERPS) 1047, University of Warwick, Department of Economics.
  6. Lopatta, Kerstin & Kaspereit, Thomas, 2014. "The cross-section of returns, benchmark model parameters, and idiosyncratic volatility of nuclear energy firms after Fukushima Daiichi," Energy Economics, Elsevier, vol. 41(C), pages 125-136.

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