Investor response to a natural disaster: Evidence from Japan's 2011 earthquake

Matthew Hood, Akiko Kamesaka, John Nofsinger and Teruyuki Tamura

Pacific-Basin Finance Journal, 2013, vol. 25, issue C, 240-252

Abstract: Japan's most powerful known earthquake struck at 2:46p.m. on Friday, March 11, 2011. We study the unusual trading behaviors of individual and foreign investors in Japan during the aftermath of this natural disaster. Individual investors typically show contrarian trading patterns, so the sharp downturn in the Nikkei should cause positive net purchases. Instead, purchases were significantly less than sales in the week after the earthquake. Foreign investors typically show positive feedback and momentum trading patterns. However, in the week after the earthquake, they seemed to have stabilized the Japanese stock markets by dramatically increasing their trading activity and net purchases.

Keywords: Natural disaster; Earthquake; Japan; Individual investors; Foreign investors (search for similar items in EconPapers)
JEL-codes: G01 G02 G15 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:25:y:2013:i:c:p:240-252

DOI: 10.1016/j.pacfin.2013.09.006

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