PubData Leuphana Repository: The Shareholder Value Effect of System Overloads: An Analysis of Investor Responses to the 2003 Blackout in the US

Please use this identifier to cite or link to this item: https://doi.org/10.48548/pubdata-1537

Resource type	Journal Article
Title(s)	The Shareholder Value Effect of System Overloads: An Analysis of Investor Responses to the 2003 Blackout in the US
DOI	10.48548/pubdata-1537
Handle	20.500.14123/1611
Creator	Bouzzine, Yassin Denis 0000-0003-2661-541X Lueg, Rainer 0000-0002-6172-944X
Abstract	This study investigates the stock price reaction of electric energy utility firms to the 2003 blackout in the Northeast of the USA and if the market was able to identify the responsible firm. Therefore, we employ event study methodology and select a sample of US-based electric energy utility firms. Although it took a commission almost eight months to name the firm responsible for the blackout, investors punished FirstEnergy only two trading days after the blackout - and were right, as it later turned out. This study demonstrates this based on the analysis of abnormal stock returns and abnormal trading volumes. Our findings suggest that investors have extensive knowledge of electric energy utility firms' responsibility as they were able to identify the culprit. This, in turn, demonstrates that electric power utility firms should ensure a high-quality grid infrastructure to avoid these negative outcomes.
Language	English
Keywords	Event Study; Blackout; System Overload; Market Efficiency
Year of publication in PubData	2024
Publishing type	Parallel publication
Publication version	Published version
Date issued	2021-11-03
Creation context	Research
Notes	This publication was funded by the Open Access Publication Fund of Leuphana University Lüneburg.
Published by	Medien- und Informationszentrum, Leuphana Universität Lüneburg
Related resources	Relations of this publication Relations of this publication