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Stock market response to potash mine disasters

Author

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  • Oskar Kowalewski

    (LEM - Lille économie management - UMR 9221 - UA - Université d'Artois - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique)

  • Piotr Śpiewanowski

Abstract

We examine the stock market reaction to disasters in potash mines. We use a sample of 55 mining accidents – natural and man-made - worldwide over the period 1986–2019. On average, the affected mining firms experience a cumulative drop in their market value of 1.15% in the first 2 ​day ​day of a disaster. We show also that the accidents impact stocks of the current and future (greenfield) competitors of the affected firms. The direction and size of the effect is determined by the relative strength of the negative risk effect and positive price and supply effects.

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  • Oskar Kowalewski & Piotr Śpiewanowski, 2020. "Stock market response to potash mine disasters," Post-Print hal-02987126, HAL.
    • Handle: RePEc:hal:journl:hal-02987126
    DOI: 10.1016/j.jcomm.2020.100124
    Note: View the original document on HAL open archive server: https://hal.science/hal-02987126
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    More about this item

    Keywords

    Potash mine; Disasters; Event study; Working accident; Catastrophe;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • Q27 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Issues in International Trade
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects

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