Penalties for industrial accidents: The impact of the Deepwater Horizon accident on BP’s reputation and stock market returns
Fig 5
Total Returns of BP vs. synthetic control.
Note: In S1 Appendix, we have added the figure with the synthetic control without oil and gas companies. There is a necessary tradeoff here; restricting the set of possible components for the synthetic control may help address concerns about contagion but will also reduce the fit of the model. This is why we include oil and gas companies in the original synthetic control and test for spillovers in our robustness checks. Moreover, excluding oil and gas firms from the synthetic control yields essentially the same result as our original model. We also added a figure with the synthetic control based only on oil and gas companies, as comparison.