How Policy Changes Affect Shareholder Wealth: The Case of the Fukushima Daiichi Nuclear Disaster
AbstractThis 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 InfoPaper provided by Universitätsbibliothek Wuppertal, University Library in its series Schumpeter Discussion Papers with number sdp11011.
Date of creation: Jul 2011
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Web page: http://elpub.bib.uni-wuppertal.de
Electric Power; Nuclear Power; Green Economy; Earthquake; Tsunami; Event Study; Environment;
Other versions of this item:
- André Betzer & Markus Doumet & Ulf Rinne, 2013. "How policy changes affect shareholder wealth: the case of the Fukushima Dai-ichi nuclear disaster," Applied Economics Letters, Taylor & Francis Journals, vol. 20(8), pages 799-803, May.
- Betzer, André & Doumet, Markus & Rinne, Ulf, 2011. "How Policy Changes Affect Shareholder Wealth: The Case of the Fukushima Daiichi Nuclear Disaster," IZA Discussion Papers 5896, Institute for the Study of Labor (IZA).
- Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
- Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters
- G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-08-09 (All new papers)
- NEP-ENE-2011-08-09 (Energy Economics)
- NEP-ENV-2011-08-09 (Environmental Economics)
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