How Do Investors Evaluate Business Continuity Management Disclosures in Emergency Situations? Evidence from the Great East Japan Earthquake

• In Event: Concurrent Session 1.3: Financial Reporting and Disclosures

Abstract

This study examines economic effects of BCM(business continuity management) disclosures through analyzing changes in shareholder returns in the wake of the Great East Japan Earthquake. I examine differences in the recovery of share price between disclosing and non-disclosing corporations. The results show that the cumulative average abnormal returns (CAAR) of disclosing corporations recovered faster than non-disclosing corporations. Then, I examine differences in the recovery of share price between developing and non-developing corporations. The results show that there are no statistically significant differences in the recovery of share price between developing and non-developing corporations. Finally, I examine the differences of BCM between disclosing and non-disclosing corporations. The results suggest that BCM or BCP disclosing corporations have the broader coverage of the BCP, more appropriate procedures for responding to emergency situations, more effective training of the BCM, and more mature BCM system than non-disclosing ones.

Author

• Tetsuyuki Kagaya, Hitotsubashi University