The Influence of Aviation Disasters on Engine Manufacturers: an Analysis of Financial and Reputational Contagion Risks
International Review of Financial Analysis 74 (2021) 101630 Contents lists available at ScienceDirect International Review of Financial Analysis journal homepage: www.elsevier.com/locate/irfa The influenceof aviation disasters on engine manufacturers: An analysis of financial and reputational contagion risks Erdinc Akyildirim a,b,c, Shaen Corbet d,e,*, John F. O’Connell f, Ahmet Sensoy g a Department of Banking and Finance, University of Zurich, Zurich, Switzerland b Department of Banking and Finance, Burdur Mehmet Akif Ersoy University, Burdur, Turkey c Department of Mathematics, ETH, Zurich, Switzerland d DCU Business School, Dublin City University, Dublin 9, Ireland e School of Accounting, Finance and Economics, University of Waikato, New Zealand f Centre of Aviation Research, School of Hospitality and Tourism Management, University of Surrey, UK g Faculty of Business Administration, Bilkent University, Ankara 06800, Turkey ARTICLE INFO ABSTRACT Keywords: One of the key sub-sectors in the aviation industry includes that of engine manufacturers, who have long led Aviation disasters technological advancement and the battle to reduce airline carbon emissions. However, these same companies Contagion have been susceptible to a number of issues that have been central to international airlines due to higher costs Engine manufacturers and competition pressures. When an aviation disaster occurs, there is widespread allocation of blame and re Financial markets sponsibility, which has left engine manufacturers exposed until the true cause is identified. This can generate Reputational risks Tourism many issues with regards to reputational damage and ability to generate finance. We set out to analyse such Transport interactions over time and region. Our results indicate that engine manufacturers have had to contend with substantial income and financial leverage issues in the aftermath of a major aviation disaster, irrespective of whether they have been identified as a causation factor in the incident itself.
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