The impacts of natural marine disasters on shipping industry in China: An event study

Abstract

Currently, global warming leads to a notable increase in natural marine disasters. It is imperative that the academic community undertake a quantitative assessment of the impacts of natural marine disasters on shipping industry in China. The event study revealed that natural marine disasters lead to negative abnormal trading volume and abnormal stock returns for the Chinese shipping industry. Moreover, the findings of the regression analysis indicated that abnormal trading volume was positively related to abnormal stock return. Overall, natural marine disasters may lower investors' expectation on the development of the shipping firms, which would adversely affect shipping firms' market value. The findings of our paper highlighted the importance of disaster management in the shipping industry, which suggests managers in shipping industry should improve disaster management. Our research contributes to the research area of the economic effects of natural disasters and the effects of uncertainty on firms' investments.