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Stock market reactions to wars and political risks: A cliometric perspective for a falling empire

Avni Hanedar and Elmas Yaldız Hanedar

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper, based on cliometric methodology we use new historical data on the most popular stocks traded at the İstanbul bourse between 1910 and 1914, to examine the effect of wars on stock market prices. During this period, the Ottoman Empire was involved in the Turco-Italian and the Balkan wars, leading to massive land losses and risks for the companies before the First World War. The data are manually collected from the available volumes of a daily Ottoman newspaper, Tanin. Our findings are surprising, as we observe only a temporary and small drop in stock prices, indicating little perceived risk by stock investors of the İstanbul bourse.

Keywords: Cliometrics; The İstanbul stock exchange; stocks; the Turco-Italian war; the Balkan wars; Structural breaks (search for similar items in EconPapers)
JEL-codes: E44 G1 N25 (search for similar items in EconPapers)
Date: 2017-02-02, Revised 2018-03-25
New Economics Papers: this item is included in nep-ara, nep-his, nep-mac and nep-rmg
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