The Price of Conflict: A study of Oil Companies in Nigeria

Abstract

In this thesis, we use an event study methodology to investigate whether oil producers holding concessions in Nigeria have benefitted from conflict and regulatory shocks assumed to inflict changes in the business environment. Using a sample of 28 companies and 52 events in Nigeria from 2001 to 2017, we find that events decreasing the intensity of conflict led to positive abnormal returns on average. No average reaction is detected for events rising the intensity of conflict. Further, we find evidence of average positive abnormal returns in response to events lowering barriers to entry, governmental bargaining power and transparency. We find no average abnormal returns for events causing higher barriers to entry, rising governmental bargaining power, or increased transparency.