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Measuring Downsize Reputational Risk in the Oil & Gas Industry

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Advances in Complex Data Modeling and Computational Methods in Statistics

Part of the book series: Contributions to Statistics ((CONTRIB.STAT.))

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Abstract

This paper aims to present a new approach to measure downsize reputational risk, based on an event study methodology. To this aim, the share market value is used as a proxy of the company’s ability to create economic value, and the market reaction to different types of event is analyzed. Empirical data are derived from a large multinational company, operating in the Oil & Gas industry, with a dataset of 67 events, concerning environmental, social and economic performances. In detail, we propose a new model and we show how it overcomes the limitations of previous approaches by providing for each event a confidence interval for the estimated downsize impact and taking into account both the presence of price sensitive events and the share volatility. In this way, the proposed model provides the company’s managers with a clear insight about the impact and statistical significance of each event.

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Authors and Affiliations

  1. Dipartimento di Ingegneria Gestionale, Politecnico di Milano, Piazza Leonardo da Vinci 32, 20133, Milano, Italy

    Marika Arena, Giovanni Azzone & Antonio Conte

  2. MOX – Dipartimento di Matematica, Politecnico di Milano, Piazza Leonardo da Vinci 32, 20133, Milano, Italy

    Piercesare Secchi & Simone Vantini

Authors
  1. Marika Arena
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  2. Giovanni Azzone
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  3. Antonio Conte
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  4. Piercesare Secchi
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  5. Simone Vantini
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Corresponding author

Correspondence to Marika Arena .

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Editors and Affiliations

  1. Dipartimento di Matematica, Politecnico di Milano, Milano, Milano, Italy

    Anna Maria Paganoni

  2. Dipartimento di Matematica, Politecnico di Milano, Milano, Milano, Italy

    Piercesare Secchi

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Arena, M., Azzone, G., Conte, A., Secchi, P., Vantini, S. (2015). Measuring Downsize Reputational Risk in the Oil & Gas Industry. In: Paganoni, A., Secchi, P. (eds) Advances in Complex Data Modeling and Computational Methods in Statistics. Contributions to Statistics. Springer, Cham. https://doi.org/10.1007/978-3-319-11149-0_3

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