How the Financial Markets Reacted to the Fukushima Daiichi Nuclear Crisis

Open Access
Author:
Truitt, Gregory Edward
Area of Honors:
Finance
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
  • Michelle Lowry, Thesis Supervisor
  • James Alan Miles, Honors Advisor
  • James Alan Miles, Faculty Reader
Keywords:
  • finance
  • financial market reactions
  • nuclear crisis
Abstract:
This thesis aims to acquaint readers with how financial markets react to nuclear crises. It is a topic of considerable interest because nuclear crises, such as the Fukushima Daiichi Nuclear Disaster, tend to make big headlines and appeal to the general public. I have chosen to first give a brief overall background of the crisis so that I may delve into the financial aspects of the crisis in the following section of the paper. The introduction of the crisis background will be written mainly based off of secondary research. However, the financial analysis, which comprises the majority of the paper, will be primary research, as I am conducting the analysis myself rather than obtaining the information from other papers. The focus of this paper is the analysis of what happened in the financial markets. I have used daily data to make tables and graphs as well as do certain calculations to see how relevant stocks and indices reacted to the unexpected news that was the Japanese Nuclear Crisis. I took two main approaches to analyze the financial realm of the crisis. First, I looked at what happened to the stock for several days immediately following the crisis to analyze price levels and percent changes. The other analysis approach that I took was conducting an event study. I observed how the stocks performed on average before the crisis struck and then examined their performance after the disaster.