Movers and Shakers: Stock Market Response to Induced Seismicity in Oil and Gas Business
Investors increasingly need to account for concerns about non-financial performance and to consider the environmental impact of fossil fuel investment. We analyze how financial investors appreciate induced seismicity in oil and gas fields in the US and the Netherlands. We employ an event study to in...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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MDPI AG
2021-12-01
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| Series: | Energies |
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| Online Access: | https://www.mdpi.com/1996-1073/14/23/8051 |
| _version_ | 1797507879842873344 |
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| author | Matthijs Jan Kallen Bert Scholtens |
| author_facet | Matthijs Jan Kallen Bert Scholtens |
| author_sort | Matthijs Jan Kallen |
| collection | DOAJ |
| description | Investors increasingly need to account for concerns about non-financial performance and to consider the environmental impact of fossil fuel investment. We analyze how financial investors appreciate induced seismicity in oil and gas fields in the US and the Netherlands. We employ an event study to investigate the stock market reaction of investors in two fossil fuel majors, ExxonMobil and Royal Dutch Shell. We establish that stock market participants’ response is positively but weakly related to induced seismicity with ExxonMobil. This suggests that markets might interpret this seismicity as a signal of future productivity. With Royal Dutch Shell, there is no significant association, suggesting that their investors do not specifically appreciate its externalities. We conclude that the externality of induced seismicity goes unpriced. |
| first_indexed | 2024-03-10T04:54:44Z |
| format | Article |
| id | doaj.art-d7e92893660845edb09cb116ba16d8ed |
| institution | Directory Open Access Journal |
| issn | 1996-1073 |
| language | English |
| last_indexed | 2024-03-10T04:54:44Z |
| publishDate | 2021-12-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Energies |
| spelling | doaj.art-d7e92893660845edb09cb116ba16d8ed2023-11-23T02:21:52ZengMDPI AGEnergies1996-10732021-12-011423805110.3390/en14238051Movers and Shakers: Stock Market Response to Induced Seismicity in Oil and Gas BusinessMatthijs Jan Kallen0Bert Scholtens1Department of Economics, Econometrics & Finance, University of Groningen, Nettelbosje 2, 9747 AE Groningen, The NetherlandsDepartment of Economics, Econometrics & Finance, University of Groningen, Nettelbosje 2, 9747 AE Groningen, The NetherlandsInvestors increasingly need to account for concerns about non-financial performance and to consider the environmental impact of fossil fuel investment. We analyze how financial investors appreciate induced seismicity in oil and gas fields in the US and the Netherlands. We employ an event study to investigate the stock market reaction of investors in two fossil fuel majors, ExxonMobil and Royal Dutch Shell. We establish that stock market participants’ response is positively but weakly related to induced seismicity with ExxonMobil. This suggests that markets might interpret this seismicity as a signal of future productivity. With Royal Dutch Shell, there is no significant association, suggesting that their investors do not specifically appreciate its externalities. We conclude that the externality of induced seismicity goes unpriced.https://www.mdpi.com/1996-1073/14/23/8051induced seismicityoil and gas majorsfinancial valuestock marketevent study |
| spellingShingle | Matthijs Jan Kallen Bert Scholtens Movers and Shakers: Stock Market Response to Induced Seismicity in Oil and Gas Business Energies induced seismicity oil and gas majors financial value stock market event study |
| title | Movers and Shakers: Stock Market Response to Induced Seismicity in Oil and Gas Business |
| title_full | Movers and Shakers: Stock Market Response to Induced Seismicity in Oil and Gas Business |
| title_fullStr | Movers and Shakers: Stock Market Response to Induced Seismicity in Oil and Gas Business |
| title_full_unstemmed | Movers and Shakers: Stock Market Response to Induced Seismicity in Oil and Gas Business |
| title_short | Movers and Shakers: Stock Market Response to Induced Seismicity in Oil and Gas Business |
| title_sort | movers and shakers stock market response to induced seismicity in oil and gas business |
| topic | induced seismicity oil and gas majors financial value stock market event study |
| url | https://www.mdpi.com/1996-1073/14/23/8051 |
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