Isolating the corporate reputational risk in environmental oil spill disasters
This paper isolate the corporate reputational risk incurred by Oil and Gas companies, listed in the NYSE, derived from recent medium sized and large oil spill disasters occurred from 2005 to 2011 in the US. For this purpose, we conduct a standard short-horizon daily event study analysis to calibrate the potential impact of such environmental episodes on the market value of the firms analyzed. Since the accidental spillages are proved to have a negative effect on the cumulative abnormal returns (henceforth, CAR) of the firm’s stock, reputational risk can be identified by adjusting abnormal returns by a certain Loss Ratio, in order to capture the difference between the plummeted firm’s market value and the operational loss incurred by the company. The new magnitude, CAR (Rep), is then introduced to disentangle operational losses from reputational damage.
|Date of creation:||Jul 2013|
|Date of revision:|
|Contact details of provider:|| Postal: Carretera de Utrera km.1, 41013 Sevilla|
Phone: + 34 954 97 7444
Fax: + 34 954 34 8353
Web page: http://www.upo.es/defc/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Alexander Dyck & Adair Morse & Luigi Zingales, 2007.
"Who Blows the Whistle on Corporate Fraud?,"
NBER Working Papers
12882, National Bureau of Economic Research, Inc.
- Fama, Eugene F, 1970. "Efficient Capital Markets: A Review of Theory and Empirical Work," Journal of Finance, American Finance Association, vol. 25(2), pages 383-417, May.
- Cummins, J. David & Lewis, Christopher M. & Wei, Ran, 2006. "The market value impact of operational loss events for US banks and insurers," Journal of Banking & Finance, Elsevier, vol. 30(10), pages 2605-2634, October.
- Brown, Stephen J. & Warner, Jerold B., 1985. "Using daily stock returns : The case of event studies," Journal of Financial Economics, Elsevier, vol. 14(1), pages 3-31, March.
- A. Craig MacKinlay, 1997. "Event Studies in Economics and Finance," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 13-39, March.
- Capelle-Blancard, Gunther & Laguna, Marie-Aude, 2010.
"How does the stock market respond to chemical disasters?,"
Journal of Environmental Economics and Management,
Elsevier, vol. 59(2), pages 192-205, March.
- Marie-Aude Laguna & Gunther Capelle-Blancard, 2010. "How Does the Stock Market Respond to Chemical Disasters?," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00637961, HAL.
- repec:hal:journl:halshs-00637961 is not listed on IDEAS
- Fama, Eugene F, et al, 1969. "The Adjustment of Stock Prices to New Information," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 10(1), pages 1-21, February.
- Dodd, Peter & Warner, Jerold B., 1983. "On corporate governance : A study of proxy contests," Journal of Financial Economics, Elsevier, vol. 11(1-4), pages 401-438, April.
- Fiordelisi, Franco & Soana, Maria-Gaia & Schwizer, Paola, 2013. "The determinants of reputational risk in the banking sector," Journal of Banking & Finance, Elsevier, vol. 37(5), pages 1359-1371.
- William F. Sharpe, 1963. "A Simplified Model for Portfolio Analysis," Management Science, INFORMS, vol. 9(2), pages 277-293, January.
- David L. Deephouse & Suzanne M. Carter, 2005. "An Examination of Differences Between Organizational Legitimacy and Organizational Reputation," Journal of Management Studies, Wiley Blackwell, vol. 42(2), pages 329-360, 03.
- Gillet, Roland & Hübner, Georges & Plunus, Séverine, 2010.
"Operational risk and reputation in the financial industry,"
Journal of Banking & Finance,
Elsevier, vol. 34(1), pages 224-235, January.
- Roland Gillet & Georges Hübner & Séverine Plunus, 2010. "Operational risk and reputation in the financial industry," ULB Institutional Repository 2013/142646, ULB -- Universite Libre de Bruxelles.
- Robert D. Klassen & Curtis P. McLaughlin, 1996. "The Impact of Environmental Management on Firm Performance," Management Science, INFORMS, vol. 42(8), pages 1199-1214, August.
- Cannas, Giuseppina & Masala, Giovanni & Micocci, Marco, 2009. "Quantifying reputational effects for publicly traded financial institutions," Journal of Financial Transformation, Capco Institute, vol. 27, pages 76-81.
- repec:dau:papers:123456789/3187 is not listed on IDEAS
When requesting a correction, please mention this item's handle: RePEc:pab:fiecac:13.02. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Publicación Digital - UPO)
If references are entirely missing, you can add them using this form.