Market response of US equities to domestic natural disasters: industry‐based evidence

Ihtisham Abdul Malik, Robert Faff and Kam F. Chan

Accounting and Finance, 2020, vol. 60, issue 4, 3875-3904

Abstract: This study investigates US industry‐based price response to domestic natural disasters over the period 1960–2015. Using an event study methodology, we estimate pre‐, during and post‐disaster impacts. We document a slower response in the pre‐disaster period than in the post‐disaster period. We further find that industries react differently to the same disaster and that reactions are not always negative. For example, meteorological disasters have a positive (negative) market impact on Gold (Banking). Moreover, we provide evidence that not every industry responds similarly to different disasters, e.g., Gold reacts positively (negatively) to meteorological (geophysical) disasters.

Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:bla:acctfi:v:60:y:2020:i:4:p:3875-3904

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