title: Do industrial incidents in the chemical sector create equity market contagion?
abstract: BACKGROUND
  This paper examines a number of US chemical industry incidents and their effect on equity prices of the incident company. Furthermore, this paper then examines the contagion effect of this incident on direct competitors.
  
  
  METHODS
  Event study methodology is used to assess the impact of chemical incidents on both incident and competitor companies.
  
  
  RESULTS
  This paper finds that the incident company experiences deeper negative abnormal returns as the number of injuries and fatalities as a result of the incident increases. The equity value of the competitor companies suffer substantial losses stemming from contagion effects when disasters that occur cause ten or more injuries and fatalities, but benefit from the incident through increasing equity value when the level of injury and fatality is minor.
  
  
  CONCLUSIONS
  Presence of contagion suggests collective action may reduce value destruction brought about by safety incidents that result in significant injury or loss of life.
  
  
  CONCLUSIONS
  This research can be used as a resource to promote and justify the cost of safety mechanisms within the chemical industry, as incidents have been shown to negatively affect the equity value of the not just the incident company, but also their direct competitors.
authors.affiliation: DCU Business School, Dublin City University, Dublin 9, Ireland. Electronic address: gavin.brown2@mail.dcu.ie.
authors.forename: Gavin D
authors.initials: GD
authors.lastname: Brown
authors.affiliation: DCU Business School, Dublin City University, Dublin 9, Ireland. Electronic address: shaen.corbet@dcu.ie.
authors.forename: Shaen
authors.initials: S
authors.lastname: Corbet
authors.affiliation: DCU Business School, Dublin City University, Dublin 9, Ireland. Electronic address: caroline.mcmullan@dcu.ie.
authors.forename: Caroline
authors.initials: C
authors.lastname: McMullan
authors.affiliation: DCU Business School, Dublin City University, Dublin 9, Ireland. Electronic address: ruchira.sharma@dcu.ie.
authors.forename: Ruchira
authors.initials: R
authors.lastname: Sharma
mesh_terms: D000062:Accidents, Occupational / Q000191:economics* / Q000706:statistics & numerical data*; D002617:Chemical Industry / Q000191:economics* / Q000706:statistics & numerical data*; D006801:Humans; D012449:Safety; D014481:United States
keywords: Chemical incidents; Contagion effects; Event study; Risk management; Stock markets