Movers and shakers : stock market response to induced seismicity in oil and gas business
Abstract
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.
Citation
Kallen , M J & Scholtens , B 2021 , ' Movers and shakers : stock market response to induced seismicity in oil and gas business ' , Energies , vol. 14 , no. 23 , e8051 . https://doi.org/10.3390/en14238051
Publication
Energies
Status
Peer reviewed
ISSN
1996-1073Type
Journal article
Rights
Copyright: © 2021 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https:// creativecommons.org/licenses/by/4.0/
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