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Pesticide industry regulation: Economic consequences as revealed through stock price behavior

Author

Listed:
  • Mark S. Johnson

    (Finance, University of Idaho)

  • Ron C. Mittelhammer

    (Agricultural Economics, Washington State University)

  • Don P. Blayney

    (USDA, ERS)

Abstract

Previous studies of the economic consequences of regulation of the pesticide industry and their products have tended to focus upon agricultural commodity producers and consumers. This article examines stock price behavior by means of event study methodology in order to measure the impact of selected regulatory decisions on producers of pesticides in the United States. Several regulatory actions were found to have significant negative impacts on the US pesticide industry, ranging between 1.6% and 3.0% of shareholder value. The incidence of these effects depended on the type of regulation instituted and the circumstances surrounding the decision to change a regulation. © 1992 John Wiley & Sons, Inc.

Suggested Citation

  • Mark S. Johnson & Ron C. Mittelhammer & Don P. Blayney, 1992. "Pesticide industry regulation: Economic consequences as revealed through stock price behavior," Agribusiness, John Wiley & Sons, Ltd., vol. 8(4), pages 347-364.
    • Handle: RePEc:wly:agribz:v:8:y:1992:i:4:p:347-364
    DOI: 10.1002/1520-6297(199207)8:4<347::AID-AGR2720080407>3.0.CO;2-3
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    References listed on IDEAS

    as
    1. John J. Binder, 1985. "Measuring the Effects of Regulation with Stock Price Data," RAND Journal of Economics, The RAND Corporation, vol. 16(2), pages 167-183, Summer.
    2. Hughes, John S & Magat, Wesley A & Ricks, William E, 1986. "The Economic Consequences of the OSHA Cotton Dust Standards: An Analysis of Stock Price Behavior," Journal of Law and Economics, University of Chicago Press, vol. 29(1), pages 29-59, April.
    3. Dann, Larry Y & James, Christopher M, 1982. "An Analysis of the Impact of Deposit Rate Ceilings on the Market Values of Thrift Institutions," Journal of Finance, American Finance Association, vol. 37(5), pages 1259-1275, December.
    4. Jarrell, Gregg & Peltzman, Sam, 1985. "The Impact of Product Recalls on the Wealth of Sellers," Journal of Political Economy, University of Chicago Press, vol. 93(3), pages 512-536, June.
    5. Schipper, K & Thompson, R, 1983. "The Impact Of Merger-Related Regulations On The Shareholders Of Acquiring Firms," Journal of Accounting Research, Wiley Blackwell, vol. 21(1), pages 184-221.
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    Cited by:

    1. José Luis Sánchez & Ladislao Sotorrío, 2007. "The Creation of Value Through Corporate Reputation," Journal of Business Ethics, Springer, vol. 76(3), pages 335-346, December.

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