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

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 disast...

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Bibliographic Details
Published in:Economics letters 2023-07, Vol.228, p.111153, Article 111153
Main Authors: Sakariyahu, Rilwan, Lawal, Rodiat, Oyekola, Olayinka, Dosumu, Oluwatoyin Esther, Adigun, Rasheed
Format: Article
Language:English
Subjects:
Earthquake
Investor sentiment
Stock market
Trading partners
Turkey–Syria
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Summary: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. •We find a significant impact of the earthquake on investor sentiments and the impact is more pronounced particularly for investors in countries that have strong economic ties with Turkey.•We find a negative and statistically significant impact at the 1% level between the earthquake disaster and the returns of the sampled stock markets.•Our results reveal that the returns of the sampled markets on the first day, and 3 days after the event were negatively impacted but started recovering thereafter.•The impact of the disaster is severe for stock markets within the proximity of Turkey than those geographically farther.
ISSN:0165-1765
1873-7374
DOI:10.1016/j.econlet.2023.111153