Stock Market Reactions to Corporate Apologies: Evidence from Chemical Disasters

Date of Award


Document Type


Degree Name

Bachelor of Arts




My study examines the effects of corporate apologies using evidence from chemical disasters. I consider a sample of 31 corporate apologies for industrial incidents associated with firms publicly traded in the U.S. spanning the period from 1974 to 2017. After performing event studies, I show that corporate apologies have mixed impacts on stock markets, and different characteristics of apologies do matter. While apologies for incidents which have received extensive media attention have slightly negative or no impacts on the equity value of firms, investors respond positively to apologies for incidents lack of media coverage. Using cross-sectional regression analysis, I find different types and monetary costs of apologies as well as the responding time all affect impacts of apologies. Therefore, my study has strong corporate policy implications in terms of crisis management.

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