Movers and shakers: Stock market response to induced seismicity in oil and gas business

Matthijs Jan Kallen, Bert Scholtens*

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

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Investors increasingly need to account for concerns about non-financial performance and to consider the environmental impact of fossil fuel investment. We analyze how financial investors appreciate induced seismicity in oil and gas fields in the US and the Netherlands. We employ an event study to investigate the stock market reaction of investors in two fossil fuel majors, ExxonMobil and Royal Dutch Shell. We establish that stock market participants’ response is positively but weakly related to induced seismicity with ExxonMobil. This suggests that markets might interpret this seismicity as a signal of future productivity. With Royal Dutch Shell, there is no significant association, suggesting that their investors do not specifically appreciate its externalities. We conclude that the externality of induced seismicity goes unpriced.

Original languageEnglish
Article number8051
Number of pages12
Issue number23
Publication statusPublished - 1-Dec-2021


  • Event study
  • Financial value
  • Induced seismicity
  • Oil and gas majors
  • Stock market

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