From research: Impact of rent tax announcement on Norwegian salmon farming market stock returns

What is the impact of rent tax announcement on Norwegian salmon farming market stock returns? Salmon aquaculture farming industry has been perceived as remarkably profitable, making it a special rent taxation candidate. In a paper published by dr. P. MOLNÁR in the Aquaculture Economics & Management journal, the authors investigated the impact of both rent tax announcement and its implementation on Norwegian companies in this industry.

A difference-in-differences econometric approach, a commonly used method to estimate the impact of policy changes by comparing a group that is affected by the change (treatment group, i.e. in this case salmon farming companies operating in Norway) with a group that is not (control group, i.e. salmon farming companies operating outside of Norway) was applied. On a sample of eight salmon-producing companies (four in the treatment group and four in the control group), causal effect on stock returns of the affected companies was measured relative to the non-affected.

Findings reveal a statistically significant, large negative return for affected companies on the rent taxation announcement day, and, on the contrary, weak or no effect on the rent taxation implementation day.

This result is consistent with the efficient market hypothesis saying that only new information moves stock prices. Read further at: https://www.tandfonline.com/doi/full/10.1080/13657305.2024.2342268