Investor response to a natural disaster: Evidence from Japan's 2011 earthquake
AbstractJapan's most powerful known earthquake struck at 2:46p.m. on Friday, March 11, 2011. We study the unusual trading behaviors of individual and foreign investors in Japan during the aftermath of this natural disaster. Individual investors typically show contrarian trading patterns, so the sharp downturn in the Nikkei should cause positive net purchases. Instead, purchases were significantly less than sales in the week after the earthquake. Foreign investors typically show positive feedback and momentum trading patterns. However, in the week after the earthquake, they seemed to have stabilized the Japanese stock markets by dramatically increasing their trading activity and net purchases.
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Bibliographic InfoArticle provided by Elsevier in its journal Pacific-Basin Finance Journal.
Volume (Year): 25 (2013)
Issue (Month): C ()
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Web page: http://www.elsevier.com/locate/pacfin
Natural disaster; Earthquake; Japan; Individual investors; Foreign investors;
Find related papers by JEL classification:
- G01 - Financial Economics - - General - - - Financial Crises
- G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
- G02 - Financial Economics - - General - - - Behavioral Finance: Underlying Principles
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