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Pesticide industry regulation: economic consequences as revealed through stock price behavior
- Johnson, M.S., Mittelhammer, R.C., Blayney, D.P.
- Agribusiness 1992 v.8 no.4 pp. 347
- pesticides, industry, economic impact, stocks and shares, market prices, costs and returns, mathematical models, laws and regulations, manufacturing, risk, United States
- Previous studies of the economic consequences of regulation of the pesticide industry and their products have tended to focus upon agricultural commodity producers and consumers. This article examines stock price behaviour by means of event study methodology in order to measure the impact of selected regulatory decisions on producers of pesticides in the USA. Several regulatory actions were found to have significant negative impacts on the US pesticide industry, ranging between 1.6% and 3.0% of shareholder value. The incidence of these effects depended on the type of regulation instituted and the circumstances surrounding the decision to change a regulation.