How policy changes affect shareholder wealth: the case of the Fukushima Dai-ichi nuclear disaster

Abstract

This article analyses how policy changes affect shareholder wealth by exploiting the unexpected German reaction to the Japanese nuclear disaster. Event study results show that energy companies' shareholder wealth was affected by the policy reaction and not by the disaster.

Keywords:

• electric power
• nuclear power
• event study
• environment

JEL Classification:

• Q48
• Q54
• G38

Acknowledgements

We thank Anne C. Gielen, Simon Jäger, Peter Limbach, Erik Theissen, seminar participants at IZA and University of Mannheim and conference participants at the EAERE 2012 in Prague for helpful comments and suggestions. We also thank Daniela Geppert and Martin Schletter for their excellent research assistance.

All remaining errors are our own.

Notes

¹ Since renewable energy companies potentially suffer from nonsynchronous trading, we additionally estimate the market model applying the Scholes and Williams (1977) approach. Our results are robust towards the choice of the estimation method.