Seismic shocks and financial systems: a topological perspective on Borsa Istanbul after the earthquake

Larissa M. Batrancea (), Mehmet Ali Balcı, Ömer Akgüller, Anca Nichita and Mircea-Iosif Rus
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Larissa M. Batrancea: Babeş-Bolyai University
Mehmet Ali Balcı: Muğla Sıtkı Koçman University
Ömer Akgüller: Muğla Sıtkı Koçman University
Anca Nichita: “1 Decembrie 1918” University of Alba Iulia
Mircea-Iosif Rus: Urbanism and Sustainable Spatial Development “URBAN INCERC”

Palgrave Communications, 2024, vol. 11, issue 1, 1-14

Abstract: Abstract This study examines the impact of the Kahramanmaraş earthquake on the BIST100 index through the application of complex network analysis. The method begins by examining the correlation distance between the logarithmic returns of companies in the BIST100 index, which serves as the foundation for creating filtered weighted networks. This technique prioritizes robust financial connections while downplaying weaker ones, enabling a thorough examination of the network topological structure and identifying noteworthy financial interactions. The study employs a combination of global and local topological metrics, as well as structural entropy, to gain insights on the interconnections among markets in terms of public interest and the roles played by various entities. It demonstrates how exogenous shocks impact the network structure and reaction. Findings indicate initial notable alterations in the network framework, which were subsequently alleviated by the implementation of financial rules and market processes. This demonstrates the ability of financial markets to recover and maintain stability following a disaster. Results offer useful perspectives on the interplay between market dynamics and the resilience of the financial system in the presence of natural disasters.

Date: 2024
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DOI: 10.1057/s41599-024-04115-w

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