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

Ihtisham A. Malik, Robert W. Faff*, Kam F. Chan

*Corresponding author for this work

Research output: Contribution to journalArticleResearchpeer-review

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.

Original languageEnglish
Pages (from-to)3875-3904
JournalAccounting and Finance
Volume60
Issue number4
Early online date21 Jun 2019
DOIs
Publication statusPublished - Dec 2020
Externally publishedYes

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