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- Title
Catastrophic Events and Retroactive Liability Insurance: The Case of the MGM Grand Fire.
- Authors
Baginski, Stephen P.; Corbett, Richard B.; Ortega, William R.
- Abstract
This study examines the capital market response to the MGM Grand fire and to the announcement of MGM Grand's purchase of $170 million in retroactive liability insurance. The information transfer effect is also examined. Event study research methods support earlier findings that the news of the fire had an adverse effect on MGM's security price. Security prices of industry co-member firms, however, experienced a negative information transfer (positive returns) on the date of the fire, a result consistent with intra-industry .shifts in market share. Shifts in systematic risks were not documented for MGM or a portfolio of industry co-members.
- Subjects
RESEARCH; PURCHASING; MARKET share; LEGAL liability; CAPITAL market; LIABILITY insurance; INDUSTRIAL concentration; MARKETING strategy; INVESTMENT analysis
- Publication
Journal of Risk & Insurance, 1991, Vol 58, Issue 2, p247
- ISSN
0022-4367
- Publication type
Article
- DOI
10.2307/253236