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Unexpected Media Coverage and Stock Market Outcomes : Evidence from Chemical Disasters

dc.contributor.authorLaguna, Marie-Aude
dc.date.accessioned2011-04-04T14:15:06Z
dc.date.available2011-04-04T14:15:06Z
dc.date.issued2010-10
dc.identifier.urihttps://basepub.dauphine.fr/handle/123456789/5891
dc.language.isoenen
dc.subjectCorporate Social Responsibilityen
dc.subjectPollutionen
dc.subjectMediaen
dc.subjectEfficient Market Hypothesisen
dc.subjectBehavioral Financeen
dc.subject.ddc332en
dc.subject.classificationjelG12en
dc.subject.classificationjelG14en
dc.subject.classificationjelG30en
dc.subject.classificationjelM30en
dc.titleUnexpected Media Coverage and Stock Market Outcomes : Evidence from Chemical Disastersen
dc.typeCommunication / Conférence
dc.description.abstractenUsing the event-study methodology and multivariate regressions, this paper examines the intensity of media coverage, its determinants and its marginal effect on stock returns following chemical disasters. To do this, we build an original dataset of chemical explosions that occurred worldwide from 1990-2005. First, our results show that news coverage increases with the social and environmental consequences of the accident. Second, to deal with the fact that news coverage is determined simultaneously with stock returns, we suggest two valid and original instrumental variables: a measure of the firm’s newsworthiness and a measure of daily news pressure at the time of the disaster. We find that unexpected news coverage due to chemical disasters also respond to these conjunctural factors, and is truly exogenous to abnormal returns. Third, we show that, all else being equal (pollution, number of casualties, and firm profile), the stock market reaction to intense press coverage is delayed, and becomes negative in the long-term. At the same time, there is clear evidence that in the first days news coverage mitigates the market value losses. We interpret these results as evidence that investors are slow to recognize the extent of the loss associated with the public implications of news coverage (e.g., image and public trust deterioration). In addition, in contrast toprevious studies, we argue that press coverage is not necessarily associated with increased investor attention.en
dc.identifier.citationpages29en
dc.description.sponsorshipprivateouien
dc.subject.ddclabelEconomie financièreen
dc.relation.conftitle2010 FMA Annual Meetingen
dc.relation.confdate2010-10
dc.relation.confcityNew Yorken
dc.relation.confcountryÉtats-Unisen


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