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Earthquakes in Chile and Peru: How are they reflected in the copper financial market?

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  • Tapia-Griñen, Pablo
  • Pastén-Henríquez, Boris
  • Sepúlveda-Velásquez, Jorge

Abstract

A large earthquake is a devastating natural disaster affecting life and infrastructure. Copper, vital for combating climate change, sees over 40% production from Chile and Peru. An earthquake near these mines induces uncertainty, boosting copper prices. After analyzing copper returns after large-magnitude earthquakes (2005–2020) in Chile and Peru, event studies revealed positive abnormal returns. These are intensified by media coverage of the earthquake and available stock, which has a short-lived impact on other metals. This outlook will help investors to hedge and cope with such earthquakes.

Suggested Citation

  • Tapia-Griñen, Pablo & Pastén-Henríquez, Boris & Sepúlveda-Velásquez, Jorge, 2025. "Earthquakes in Chile and Peru: How are they reflected in the copper financial market?," Finance Research Letters, Elsevier, vol. 71(C).
    • Handle: RePEc:eee:finlet:v:71:y:2025:i:c:s1544612324014582
    DOI: 10.1016/j.frl.2024.106429
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    More about this item

    Keywords

    Copper; Earthquakes; Event studies;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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