Guilty by Association? The Case of Karin B Scare

The waste disposal industry is susceptible to bad publicity owing to the nature of the products it is sometimes required to process. At particular risk are companies which treat and dispose of hazardous substances. In this paper we test whether media concerns about public safety arising from the international transfer of hazardous wastes can have a negative impact on the stockmarket valuation of firms and of the waste disposal industry as a whole, even when the affected companies have not themselves broken the law.