37 Pages Posted: 11 Jan 2012 Last revised: 9 Jul 2013
Date Written: January 11, 2012
The purpose of this study is to investigate the effect of the accident at the Fukushima Daiichi nuclear power station, which is owned by Tokyo Electric Power Co. (TEPCO), on the stock prices of the other electric power utilities in Japan. Because the other utilities were not directly damaged by the Fukushima nuclear accident, their stock price responses should reflect the change in investor perceptions on risk and return associated with nuclear power generation. Our first finding is that the stock prices of utilities that own nuclear power plants declined more sharply after the accident than did the stock prices of other electric power utilities. In contrast, investors did not seem to care about the risk that may arise from the use of the same type of nuclear power reactors as those at the Fukushima Daiichi station. We also observe an increase of both systematic and total risks in the post-Fukushima period, indicating that negative market reactions are not merely caused by one-time losses but by structural changes in society and regulation that could increase the costs of operating a nuclear power plant.
Keywords: nuclear accident, electric power utility, event study
JEL Classification: G02, G15, Q40, Q48
Suggested Citation: Suggested Citation
Kawashima, Shingo and Takeda, Fumiko, The Effect of the Fukushima Nuclear Accident on Stock Prices of Electric Power Utilities (January 11, 2012). Energy Economics, 34(6): 2029-2038. Available at SSRN: https://ssrn.com/abstract=1983138 or http://dx.doi.org/10.2139/ssrn.1983138