Journal of Financial Economics Vol. 28 No. 1-2 1990
Wealth effects of regulatory reform
Abstract
This paper investigates the effect of California's Proposition 103 on the market value of publicly traded property- and liability-insurance companies. The passage of this referendum on November 8, 1988 moved California from a market-oriented to a heavily regulated insurance-pricing system. During the period surrounding the election, the average stock price of insurance companies doing business in California declined by 6.91%. The decline is positively related to the proportion of a firm's premiums affected by the referendum and the proportion generated in other states where insurance regulation is likely to change, and negatively related to the firm's profitability.
- DOI
- 10.1016/0304-405x(90)90054-4
- Volume
- 28
- Issue
- 1-2
- Pages
- 233-250
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref