420 SPILLOVER EFFECTS IN THE GLOBAL MINING INDUSTRY AS A COMMON GOOD PROBLEM: EVIDENCE FROM ENVIRONMENTAL DISASTERS ON FIRMS’ MARKET VALUE S.P. Montaño1, E. Castillo2 1Department of Mining Engineering, , University of Chile, Chile (sofia.montano@ug.uchile.cl) 2Assistant Professor of the Department of Mining Engineering, , University of Chile, Chile ABSTRACT Environmental disasters in mining generate not only environmental and social impacts, but also potential financial consequences reflected in capital markets. This paper analyzes whether major mining-related environmental events produce statistically and economically significant effects on the market valuation of both the responsible firms and their related peer companies. A sample of ten widely documented events was constructed, including tailings dam failures, contamination events, and regulatory rulings affecting major global mining companies. Using an event-study methodology based on the Fama–French three-factor model, abnormal returns (AR) and cumulative abnormal returns (CAR) were estimated across multiple symmetric event windows. The results show that only a subset of responsible firms exhibit statistically significant negative CAR at conventional levels, particularly in severe events such as Samarco (BHP) and Mount Polley (Imperial Metals). However, several events display economically meaningful negative CAR even when statistical significance is not consistently observed, suggesting that magnitude and persistence of the effect are relevant dimensions beyond pvalues. For peer firms, individual statistical significance is generally limited, but average CAR and the proportion of negative returns indicate the presence of moderate spillover effects in several events. These effects become more visible as the event window expands, suggesting that the market incorporates sectoral risk gradually rather than instantaneously. Overall, the findings provide evidence that environmental risk in mining can extend beyond directly responsible firms, affecting the broader sector through partial contagion mechanisms reflected in stock market behavior. KEYWORDS Mining disasters, event study, spillover, abnormal returns, reputational externalities, common goods.
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