Research On The Industry’s Stock Price Fluctuated By "Plasticizer" Event

Food incidents come out one after the other recently. On November19,2012, the21st Century Network published "Fatal Crisis: Jiugui Liquor’splasticizer exceeded260percent", which pushed the company of JiuguiLiquor into the cusp, and the "plasticizer" incident made Jiugui Liquorcompany’s stock price fell from47.58yuan to27.32yuan in two weeks, thecumulative decline was42.58%, the market value evaporated6.583billionyuan, even the liquor industry also had a corresponding loss of30billionyuan. In this Background,this article aims to researchon the wine industry’sstock price fluctuated by “plasticizer” event.In this article, the first chapter introduces the research background,significance and methods, then focuses on the relevant literatures home andabroad which will be the theoretical basis for the empirical analysis in laterchapters. Then the second chapter will introduce the definition of plasticizer,its hazards, sources and a brief review of the entire event. Next chapter, itwill first have qualitative analysis, then make use of the event study andapply Mean-Adjusted-Model and Market-Model to make quantitativeanalysis of the impact on the stock price of Jiugui Liquor company andrelated industries as a result of the “plasticizer” event. The result is that thegreatest impact is in Jiugui Liquor company, followed by liquor, yellowwine industry, other wine industries even the entire food industry areadversely affected to varying degrees. Then in the fourth chapter, it willresearch what factors lead to different companies have different degrees ofnegative impact by multiple regression analysis. The results shows thatcapital-intensity, CPA-type are significant positive and can reduce thenegative impact, while the variables of chairman-or-CEO-type, audit’s opinion and outstanding-shares are significant negative, so they willincrease the negative impact. In the last chapter, it will analyze the relatedcompanies’ public-relations measures and point out how to improve, thenmake a number of policy advices on how to avoid the occurrence of similarfood incidents, hoping to make some contributes to the enterprise and themanager.