Modeling interconnections of safety and financial performance of nuclear power plants part 1: Categorical review and theoretical bases

TY - JOUR

T1 - Modeling interconnections of safety and financial performance of nuclear power plants part 1: Categorical review and theoretical bases

AU - Beal, John

AU - Sakurahara, Tatsuya

AU - Farshadmanesh, Pegah

AU - Reihani, Seyed A.

AU - Kee, Ernie

AU - Rowell, Arden

AU - Yilmaz, Fatma

AU - Mohaghegh, Zahra

N1 - Following an occupational accident, employees may be required to focus on activities associated with resolving the consequences of the accident while continuing production-supporting activities. For example, managers and supervisors of an organization may be involved in an accident investigation. In this situation, the organization prioritizes activities associated with addressing potential consequences of the accident instead of strategic planning and value-added activities, which has the potential to impact the long-term financial performance of an organization. This concept is supported by the empirical analysis conducted by Argilés-Bosch et al. (Argilé et al., 2014), who found that the percentage of injured workers in a given year has no significant influence on the short-term financial performance of an organization, measured by Return on Asset (ROA), but has a significant negative impact on the organization's financial performance one year later. Forteza et al. (2017) further explored the findings of Argilés-Bosch et al. (Argilé et al., 2014) using a different dataset in the construction industry, identifying a quadratic relation between workplace accident rates and ROA and found that there may be a tipping point in the relationship between the workplace accident rates and profitability. Their study indicated that, for firms with low workplace accident rates, the workplace accident rates may have a positive correlation with profitability; however, for firms with high worlplace accident rates, the worlplace accident rates are negatively correlated with profitability. This result can be expected considering the Cost of Safety theory, where there is a trade-off between the prevention costs and accident costs. Forteza et al. (2017) argued that for a specific range of accident rate, the incremental reduction in total accident cost can be less than the incremental increase in total prevention cost. In such a case, an organization may be over-invested in prevention and reducing this investment (and correspondingly increasing accident costs) may increase profitability, indicating a positive relation between accident rate and ROA. Forteza et al. (2017) suggested that the observed positive correlation between accident rate and ROA may be at least partially the result of very high profitability in the construction sector over the period of analysis.This research is supported by the U.S. Department of Energy, Office of Science, Office of Nuclear Energy University Program (NEUP), Reactor Concepts Research Development and Demonstration under Award #17–12614. Part of this material is based upon work supported under a Department of Energy University Programs Graduate Fellowship. Any opinions, findings, conclusions, or recommendations expressed in this report are those of the authors and do not necessarily reflect the views of the Department of Energy, Office of Nuclear Energy. This work is also partially supported by the National Science Foundation under Grant No. 1535167. Any opinions, findings, and conclusions or recommendations expressed in this material are those of the author(s) and do not necessarily reflect the views of the National Science Foundation. The authors thank the Socio-Technical Risk Analysis Research Laboratory (http://soteria.npre.illinois.edu/) team members for their feedback. This research is supported by the U.S. Department of Energy , Office of Science , Office of Nuclear Energy University Program ( NEUP ), Reactor Concepts Research Development and Demonstration under Award #17–12614. Part of this material is based upon work supported under a Department of Energy University Programs Graduate Fellowship. Any opinions, findings, conclusions, or recommendations expressed in this report are those of the authors and do not necessarily reflect the views of the Department of Energy, Office of Nuclear Energy. This work is also partially supported by the National Science Foundation under Grant No. 1535167 . Any opinions, findings, and conclusions or recommendations expressed in this material are those of the author(s) and do not necessarily reflect the views of the National Science Foundation. The authors thank the Socio-Technical Risk Analysis Research Laboratory ( http://soteria.npre.illinois.edu/ ) team members for their feedback.

PY - 2024/6

Y1 - 2024/6

KW - Enterprise Risk Management (ERM)

KW - Financial Analysis

KW - Nuclear Power Plants (NPPs)

KW - Operational and Maintenance (O&M)

KW - Probabilistic Risk Assessment (PRA)/Probabilistic Risk Assessment (PSA)

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U2 - 10.1016/j.pnucene.2024.105123

DO - 10.1016/j.pnucene.2024.105123

M3 - Review article

SN - 0149-1970

VL - 171

JO - Progress in Nuclear Energy

JF - Progress in Nuclear Energy

M1 - 105123

ER -