Asia-Pacific Stock Market Reactions To Silicon Valley Bank's Bankruptcy

Silicon Valley Bank (SVB), a technology-oriented lender headquartered in California, declared bankruptcy on 10 March 2023, which created a worldwide stock market reaction. This study examines the impact of Silicon Valley Bank's bankruptcy news on stock markets in the Asia Pacific area. The research uses an event study methodology to evaluate market responses over five days before and after the bankruptcy announcement. Seven stock indexes, including Japan, Hong Kong, China, South Korea, Australia, Taiwan, and India, were analyzed in terms of their abnormal returns, average abnormal returns, and cumulative abnormal returns. The normality testing has verified that the data follows a normal distribution, confirming the appropriateness of the use of the paired sample t-test to test the hypothesis of whether there is a difference in abnormal returns, average abnormal returns, and cumulative abnormal returns. The findings show evidence of no statistically significant alterations in abnormal returns, average abnormal returns, or cumulative abnormal returns before and after the announcement. This situation suggests that the bankruptcy of Silicon Valley Bank had a negligible influence on stock markets in the Asia Pacific area.