Intra-Industry Effects of the Accident at Three Mile Island

The Effect of the Japan 2011 Disaster on Nuclear and Alternative Energy Stocks Worldwide - An Event Study

“…In particular, nuclear-related firms exhibited greater losses than non-nuclear firms. In contrast to Bowen, Castanias, and Daley (1983) who considered TMI, Fields and Janjigian (1989) did not find statistically significant changes in systematic risk, total risk, or market risk. Another study, which researched whether daily stock returns of U.S. electric utilities reacted to the Chernobyl nuclear catastrophe is the one by Kalra, Henderson jr., and Raines (1993), who grouped firms by their nuclear capacity.…”

“…3.1 Choice of window lengths and three-factor model estimation Although many event studies use a relatively short estimation period to avoid incorporating confounding events, we follow the event studies on nuclear disasters of Bowen, Castanias, and Daley (1983); Hill and Schneeweis (1983) which use an estimation period of three and two years, respectively. Hence, we estimate the model for a period of three years commencing on January 4, 2008 and ending on March 10, 2011.…”

“…Given the fact that abnormal returns were documented for nuclear and non-nuclear utility firms during the first two major nuclear accidents in TMI (Bowen, Castanias, and Daley 1983;Hill and Schneeweis 1983) and Chernobyl (Fields and Janjigian 1989; Kalra, Henderson jr., and Raines 1993), we establish similar hypotheses for the Fukushima-Daiichi disaster. Normally, a nuclear accident raises the general awareness of the possible risks of nuclear energy.…”

“…There are several studies in finance literature, which focus upon the consequences of nuclear disasters such as the Three Mile Island (TMI) accident in March 1979 and the Chernobyl disaster in April 1986 on stock prices. Bowen, Castanias, and Daley (1983) studied the effect of the TMI accident on daily returns of U.S. utility stocks. They found statistically significant, negative abnormal returns, in particular for firms with current or planned nuclear relations as well as a statistically significant long-run, upward shift in both residual risk and market risk after March 1979.…”

Financial Perceptions on Oil Spill Disasters: Isolating Corporate Reputational Risk

“…Bowen et al [30] examined electric utility share price reaction to the Three Mile Island (TMI) accident in 1979, obtaining statistically significant negative price reactions for nuclear-dependent utility stocks. Kalra et al [31] analyzed US stock market reactions to the Chernobyl nuclear accident in 1986, noting negative price reactions to the explosion on nuclear and non-nuclear utilities.…”