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This paper examines the equity market reaction to 77 industrial incidents involving publicly traded companies in the United States over the period 2000-2013. This sample of incidents involves 14,449 injuries and 105 fatalities, with contributing factors identified as company violations and safety errors, equipment failure, human error and vandalism. The equity market reaction is identified using a GARCH-methodology. Companies that experienced incidents that were identified as safety violations are found to suffer from the highest costs in terms of equity price reductions, but the volatility effects of these incidents tend to mitigate within two weeks. Incidents caused by vandalism experience the sharpest volatility increases, but are found to reduce within two days. Whereas, equity market volatility associated with incidents caused by equipment failure tends to persist for almost four weeks after the event. Injuries are found to cost publicly traded companies $14 million each, however, fatalities lead to equity market capitalisation reductions of between $465 and $720 million depending on the cause of the incident. Hence, these results shed light on the equity market's role as a driver for enhanced compliance with health and safety regulation and compliance with industry good practice.

This paper examines the impact of chemical industry incidents on the stock prices of the accident company and their direct competitors. Results show that the incident company experiences deeper negative abnormal returns as the number of injuries and fatalities as a result of the incident increases. The stock value of the competitor companies also suffer substantial losses stemming from contagion effects when disasters occur causing ten or more injuries or fatalities, but benefit from the incident though increasing stock value when the levels of injury and fatality is minor.