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Stock market reactions to wars and political risks: A cliometric perspective for a falling empire

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  • Hanedar, Avni Önder
  • Yaldız Hanedar, Elmas

Abstract

In this paper, based on cliometric methodology we use new historical data on the most popular stocks traded at the İstanbul bourse between 1910 and 1914, to examine the effect of wars on stock market prices. During this period, the Ottoman Empire was involved in the Turco-Italian and the Balkan wars, leading to massive land losses and risks for the companies before the First World War. The data are manually collected from the available volumes of a daily Ottoman newspaper, Tanin. Our findings are surprising, as we observe only a temporary and small drop in stock prices, indicating little perceived risk by stock investors of the İstanbul bourse.

Suggested Citation

  • Hanedar, Avni Önder & Yaldız Hanedar, Elmas, 2017. "Stock market reactions to wars and political risks: A cliometric perspective for a falling empire," MPRA Paper 85600, University Library of Munich, Germany, revised 25 Mar 2018.
  • Handle: RePEc:pra:mprapa:85600
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    File URL: https://mpra.ub.uni-muenchen.de/85612/8/MPRA_paper_85612.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Cliometrics; The İstanbul stock exchange; stocks; the Turco-Italian war; the Balkan wars; Structural breaks;

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G1 - Financial Economics - - General Financial Markets
    • N25 - Economic History - - Financial Markets and Institutions - - - Asia including Middle East

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