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Stocks and energy shocks: The impact of energy accidents on stock market value

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  • Scholtens, Bert
  • Boersen, Arieke

Abstract

We investigate how financial market participants value energy accidents. We employ an event study to look into the response of stock markets to 209 accidents. These accidents were derived from Sovacool’s (2008) database on major energy accidents from 1907 to 2007. It appears that the stock market in general does not show a significant reaction with respect to these accidents. This would suggest that financial market participants perceive energy accidents as being ‘part of the game’ and discount for most energy accidents already in the valuation of the energy industry.

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  • Scholtens, Bert & Boersen, Arieke, 2011. "Stocks and energy shocks: The impact of energy accidents on stock market value," Energy, Elsevier, vol. 36(3), pages 1698-1702.
    • Handle: RePEc:eee:energy:v:36:y:2011:i:3:p:1698-1702
    DOI: 10.1016/j.energy.2010.12.059
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    7. Schaeffer, Roberto & Borba, Bruno S.M.C. & Rathmann, Régis & Szklo, Alexandre & Castelo Branco, David A., 2012. "Dow Jones sustainability index transmission to oil stock market returns: A GARCH approach," Energy, Elsevier, vol. 45(1), pages 933-943.
    8. Mnasri, Ayman & Nechi, Salem, 2016. "Impact of terrorist attacks on stock market volatility in emerging markets," Emerging Markets Review, Elsevier, vol. 28(C), pages 184-202.
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    10. Rehman, Mobeen Ur, 2019. "Energy shocks pricing model: A non-linear US sectoral based analysis," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 535(C).
    11. Abid, Ilyes & Guesmi, Khaled & Goutte, Stéphane & Urom, Christian & Chevallier, Julien, 2019. "Commodities risk premia and regional integration in gas-exporting countries," Energy Economics, Elsevier, vol. 80(C), pages 267-276.
    12. Sovacool, Benjamin K. & Kryman, Matthew & Laine, Emily, 2015. "Profiling technological failure and disaster in the energy sector: A comparative analysis of historical energy accidents," Energy, Elsevier, vol. 90(P2), pages 2016-2027.
    13. Sunkung Choi, 2023. "Measuring economic diplomacy using event study method: the case of EU-China summit talks and Airbus stock price changes," Asia Europe Journal, Springer, vol. 21(2), pages 155-171, June.
    14. Qiuyun Wang & Lu Liu, 2022. "Pandemic or panic? A firm-level study on the psychological and industrial impacts of COVID-19 on the Chinese stock market," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 8(1), pages 1-38, December.
    15. Spada, Matteo & Paraschiv, Florentina & Burgherr, Peter, 2018. "A comparison of risk measures for accidents in the energy sector and their implications on decision-making strategies," Energy, Elsevier, vol. 154(C), pages 277-288.
    16. Sandrine Boulerne & Jean-Philippe Lafontaine & Bruno Pecchioli, 2016. "Fukushima, quel impact sur les entreprises françaises cotées de la filière de production d'électricité d'origine nucléaire ?," Post-Print hal-01902423, HAL.
    17. Kolodziej, Marek & Kaufmann, Robert K. & Kulatilaka, Nalin & Bicchetti, David & Maystre, Nicolas, 2014. "Crude oil: Commodity or financial asset?," Energy Economics, Elsevier, vol. 46(C), pages 216-223.
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    More about this item

    Keywords

    Energy accidents; Externalities; Stock market; Event study;
    All these keywords.

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General

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