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Natural disasters, investor sentiments and stock market reactions: Evidence from Turkey–Syria earthquakes

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  • Sakariyahu, Rilwan
  • Lawal, Rodiat
  • Oyekola, Olayinka
  • Dosumu, Oluwatoyin Esther
  • Adigun, Rasheed

Abstract

This study provides stylised facts on the relationships between natural disasters, investor sentiments and market performance using the recent Turkey–Syria earthquakes. We employ daily stock market data relating to Turkey’s 21 major trading partners and find significant negative impact of the disaster on the sampled countries’ stock market returns, particularly for countries near Turkey.

Suggested Citation

  • Sakariyahu, Rilwan & Lawal, Rodiat & Oyekola, Olayinka & Dosumu, Oluwatoyin Esther & Adigun, Rasheed, 2023. "Natural disasters, investor sentiments and stock market reactions: Evidence from Turkey–Syria earthquakes," Economics Letters, Elsevier, vol. 228(C).
    • Handle: RePEc:eee:ecolet:v:228:y:2023:i:c:s0165176523001787
    DOI: 10.1016/j.econlet.2023.111153
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    References listed on IDEAS

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    1. Boungou, Whelsy & Yatié, Alhonita, 2022. "The impact of the Ukraine–Russia war on world stock market returns," Economics Letters, Elsevier, vol. 215(C).
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    3. Malik, Ihtisham A. & Chowdhury, Hasibul & Alam, Md Samsul, 2023. "Equity market response to natural disasters: Does firm's corporate social responsibility make difference?," Global Finance Journal, Elsevier, vol. 55(C).
    4. Bourdeau-Brien, Michael & Kryzanowski, Lawrence, 2017. "The impact of natural disasters on the stock returns and volatilities of local firms," The Quarterly Review of Economics and Finance, Elsevier, vol. 63(C), pages 259-270.
    5. Toya, Hideki & Skidmore, Mark, 2007. "Economic development and the impacts of natural disasters," Economics Letters, Elsevier, vol. 94(1), pages 20-25, January.
    6. Berkman, Henk & Jacobsen, Ben & Lee, John B., 2011. "Time-varying rare disaster risk and stock returns," Journal of Financial Economics, Elsevier, vol. 101(2), pages 313-332, August.
    7. Boudreaux, Christopher J. & Escaleras, Monica P. & Skidmore, Mark, 2019. "Natural disasters and entrepreneurship activity," Economics Letters, Elsevier, vol. 182(C), pages 82-85.
    8. Charles Komla Adjasi & Charles Amo Yartey, 2007. "Stock Market Development in Sub-Saharan Africa: Critical Issues and Challenges," IMF Working Papers 2007/209, International Monetary Fund.
    9. Ihtisham A. Malik & Robert W. Faff & Kam F. Chan, 2020. "Market response of US equities to domestic natural disasters: industry‐based evidence," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 60(4), pages 3875-3904, December.
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    Cited by:

    1. Rilwan Sakariyahu & Audrey Paterson & Eleni Chatzivgeri & Rodiat Lawal, 2024. "Chasing noise in the stock market: an inquiry into the dynamics of investor sentiment and asset pricing," Review of Quantitative Finance and Accounting, Springer, vol. 62(1), pages 135-169, January.
    2. Sakariyahu, Rilwan & Lawal, Rodiat & Yusuf, Abdulmueez & Olatunji, Abdulganiyu, 2023. "Mass shootings, investors’ panic, and market anomalies," Economics Letters, Elsevier, vol. 231(C).
    3. Dosumu, Oluwatoyin Esther & Sakariyahu, Rilwan & Oyekola, Olayinka & Lawal, Rodiat, 2023. "Panic bank runs, global market contagion and the financial consequences of social media," Economics Letters, Elsevier, vol. 228(C).
    4. Stefano Salata & Taygun Uzelli, 2024. "The Uncertain Certainty of a Nightmare: What If Another Destructive Earthquake Strikes Izmir (Türkiye)?," Sustainability, MDPI, vol. 16(2), pages 1-26, January.

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    More about this item

    Keywords

    Earthquake; Investor sentiment; Stock market; Turkey–Syria; Trading partners;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

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