Natural Disasters – Blessings in Disguise?

24 Pages Posted: 8 Dec 2011

See all articles by Hardjo Koerniadi

Hardjo Koerniadi

Auckland University of Technology

Chandrasekhar Krishnamurti

University of South Australia

Alireza Tourani-Rad

Auckland University of Technology - Faculty of Business & Law

Date Written: December 7, 2011

Abstract

This study examines the impact of natural disasters on market returns and on several industries that are likely to be affected by the disasters. We find that different natural disasters have different impacts on the returns of the market and on those of industries. Our evidence suggests that while earthquake, hurricane and tornado could negatively affect market returns several weeks after the events, other disasters such as flood, tsunami and volcanic eruption may have limited impact on market returns. We also find that construction and materials industry is positively affected by natural disasters but nonlife and travel industries are likely to suffer when a natural disaster strikes.

Keywords: Natural disasters, market returns, industry returns, cumulative abnormal returns

JEL Classification: G14, G22

Suggested Citation

Koerniadi, Hardjo and Krishnamurti, Chandrasekhar and Tourani-Rad, Alireza, Natural Disasters – Blessings in Disguise? (December 7, 2011). 2012 Financial Markets & Corporate Governance Conference, Available at SSRN: https://ssrn.com/abstract=1969593 or http://dx.doi.org/10.2139/ssrn.1969593

Hardjo Koerniadi (Contact Author)

Auckland University of Technology ( email )

AUT City Campus
Private Bag 92006
Auckland, 1142
New Zealand

Chandrasekhar Krishnamurti

University of South Australia ( email )

37-44 North Terrace, City West Campus
Adelaide, South Australia 5001
Australia

Alireza Tourani-Rad

Auckland University of Technology - Faculty of Business & Law ( email )

3 Wakefield Street
Private Bag 92006
Auckland Central 1020, Auckland 1010
New Zealand

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