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The effects of the Fukushima Daiichi disaster on Tokyo Electric Power Company, a synthetic control method approach for financial applications
Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Statistics.
Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Statistics.
2024 (English)Independent thesis Basic level (degree of Bachelor), 10 credits / 15 HE creditsStudent thesisAlternative title
Effekterna av Fukushima Daiichi olyckan på Tokyo Electric Power Company, Syntetisk Kontrollmetod för finansiella tillämpningar (Swedish)
Abstract [en]

In this study, the synthetic control method was used to estimate the impact of the Fukushima nuclear disaster on Tokyo Electric Power Company’s (TEPCO) stock market returns. In the aftermath of the disaster, considerable attention has been directed towards understanding its operational impacts on TEPCO, the entity responsible for the facility. Far less attention has been geared towards understanding the immediate financial impact on the stock market evaluation of TEPCO. Traditional empirical approaches often struggle with the rarity and scale of such black swan events, limited by the availability of directly comparable cases. By creating a synthetic TEPCO that mimics the pre-disaster characteristics of the actual company, the post-disaster deviations in stock market performance could be attributed to the incident itself. It is shown that the impact of the nuclear disaster likely had a significant negative effect on TEPCO’s daily returns, with the effect persisting for at least 30 days. Randomisation inference tests yielded significant p-values rejecting the null that there was no difference between TEPCO and the synthetic counterfactual at the 5% significance level. In-time placebo tests reinforced the robustness of the observed post-intervention effects and ensured that they were not due to random market fluctuations. The results from a second synthetic control group without energy companies align with the results from the first, suggesting the observed impact was not due to spillover effects. 

Place, publisher, year, edition, pages
2024.
National Category
Probability Theory and Statistics
Identifiers
URN: urn:nbn:se:umu:diva-226737OAI: oai:DiVA.org:umu-226737DiVA, id: diva2:1874401
Available from: 2024-06-20 Created: 2024-06-20 Last updated: 2024-06-20Bibliographically approved

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CiteExportLink to record
Permanent link

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Cite
Citation style
  • apa
  • ieee
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
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  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
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Output format
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  • asciidoc
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