An event study of environmentally conscious shareholders in the Japanese power industry

The purpose of this paper is to investigate the impact of anti-nuclear power resolutions being proposed (and defeated) at an electric power company's annual general meeting of shareholders on the share price of the power company concerned. Using an event study methodology on a sample of eight Japanese electric power companies over a 6-year period (1991–96), it is found that there are no significant abnormal returns on shares for those companies where anti-nuclear resolutions are introduced (and defeated). In addition, the abnormal returns do not appear to exhibit any systematic behaviour related to a number of measures for the support the resolutions received. For power companies where anti-nuclear power resolutions are not introduced, there also do not appear to be any significant abnormal returns around the time of their annual meeting of shareholders. Rather than adopt the standard two-step estimation method that is typically used in event studies, an efficient estimation suggested by McKenzie and McAleer (Paper presented at the 16th South American Meetings of the Econometric Society, Lima, Peru, 11–14 August 1998) is used to estimate the parameters of interest and conduct inference.