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Stock Market Reactions to Contagious Animal Disease Outbreaks: An Event Study in Korean Foot‐and‐Mouth Disease Outbreaks
Author(s) -
Pendell Dustin L.,
Cho Chulgu
Publication year - 2013
Publication title -
agribusiness
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.57
H-Index - 43
eISSN - 1520-6297
pISSN - 0742-4477
DOI - 10.1002/agr.21346
Subject(s) - outbreak , foot and mouth disease , stock market , volatility (finance) , disease , event study , agribusiness , stock (firearms) , financial economics , business , economics , medicine , geography , virology , agriculture , context (archaeology) , archaeology
This study examines the market reactions by investors of Korean agribusiness companies following five foot‐and‐mouth disease (FMD) outbreaks using an event study analysis. The results suggest that the FMD outbreaks caused the stock market to react in both a negative and positive manner to allied companies. The results also suggest that the market reactions were more gradual than instantaneous to the FMD outbreaks. Furthermore, the FMD outbreaks appear to have increased the volatility of the daily returns with the smaller companies facing the largest changes in volatility.