2002 German Federal Elections and Associated Energy Policy: How Were Energy Corporations Financially Affected?

This paper analyzes the effect of the 2002 German federal elections to the Lower House of Parliament (Bundestag) on the financial performance of German energy corporations.We consider the last minute victory of the government coalition consisting of Social Democrats and the Green party which was generally associated with a major shift in energy policy towards the promotion of renewable energies and a phasing out of nuclear energy. Our event study approach is based on the application of the Fama-French three-factor model to estimate abnormal stock returns. The results of the empirical analysis imply neither for traditional utilities nor for renewable energy corporations any robust positive or negative impact of the elections and therefore of the general energy policy direction of the government in the next legislative period.