Corporate Scandals in Chile: Impact on the Share Prices of the Companies Involved

Abstract

In recent years a group of Chilean companies have been at the center of a series of corporate scandals. This study quantifies the impact of these events on the share prices of five emblematic companies. The results suggest that four weeks after the event, the "La Polar" case produced a market fall of 68.4%; the "Toilet Paper Cartel" (CMPC) and "Cascadas" (Soquimich) cases produced market falls of 13.8% and 16.2% respectively; while in the "Caval" (Banco de Chile) and "Chicken Cartel" (Cencosud) cases, their share prices did not fall significantly. Hypotheses that might explain these results are presented.