Reaction of foreign investors to natural disasters in the stock market: A study with least squares and wavelet coherence analysis on the Kahramanmaraş earthquakes

Fahrettin Söker; Mehmet Cihangir

doi:10.26650/ibr.2026.55.1673694

Reaction of foreign investors to natural disasters in the stock market: A study with least squares and wavelet coherence analysis on the Kahramanmaraş earthquakes

Abstract

This study examines the impact of natural disasters and sensitivity to disasters on foreign investors within the scope of stock market investments, focusing on the Kahramanmaraş earthquakes. Analyses were conducted from 11.09.2020 to 31.01.2025 using ordinary least squares regression and wavelet coherence (WTC) analyses. The OLS results showed that stock market returns, foreigners’ risk tendency, and credit default swaps (CDS) premiums had significant effects on the net changes in foreign investor portfolios. However, after the Kahramanmaraş earthquakes, the earthquakes did not change these effects. The WTC analysis found that the net change in foreign investor portfolios and the variables examined over a range of time periods and dates, including the Kahramanmaraş earthquakes, were significantly linked to each other. In these relationships, short-term causal effects emerged between sensitivity to earthquakes, returns, and risk tendencies, whereas the returns causal effects continued over a longer period. In terms of the reaction to returns, it was observed that foreign investors’ behaviors in Borsa İstanbul changed relative to before the earthquakes. However, earthquakes did not have an effect on the negative effects on CDS premiums.

Keywords

References

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Details

Primary Language

English

Subjects

Behavioural Finance, Finance

Journal Section

Research Article

Authors

Fahrettin Söker ^*
0000-0002-3763-5419
Türkiye

Mehmet Cihangir
0000-0002-3375-6408
Türkiye

Publication Date

May 22, 2026

Submission Date

April 11, 2025

Acceptance Date

November 29, 2025

Published in Issue

Year 2026 Volume: 55 Number: 1

DOI

https://doi.org/10.26650/ibr.2026.55.1673694

IZ

https://izlik.org/JA56WK92FP

Cite

RIS / Bibtex

APA

Söker, F., & Cihangir, M. (2026). Reaction of foreign investors to natural disasters in the stock market: A study with least squares and wavelet coherence analysis on the Kahramanmaraş earthquakes. Istanbul Business Research, 55(1), 51-70. https://doi.org/10.26650/ibr.2026.55.1673694

AMA

1.Söker F, Cihangir M. Reaction of foreign investors to natural disasters in the stock market: A study with least squares and wavelet coherence analysis on the Kahramanmaraş earthquakes. IBR. 2026;55(1):51-70. doi:10.26650/ibr.2026.55.1673694

Chicago

Söker, Fahrettin, and Mehmet Cihangir. 2026. “Reaction of Foreign Investors to Natural Disasters in the Stock Market: A Study With Least Squares and Wavelet Coherence Analysis on the Kahramanmaraş Earthquakes”. Istanbul Business Research 55 (1): 51-70. https://doi.org/10.26650/ibr.2026.55.1673694.

EndNote

Söker F, Cihangir M (May 1, 2026) Reaction of foreign investors to natural disasters in the stock market: A study with least squares and wavelet coherence analysis on the Kahramanmaraş earthquakes. Istanbul Business Research 55 1 51–70.

IEEE

[1]F. Söker and M. Cihangir, “Reaction of foreign investors to natural disasters in the stock market: A study with least squares and wavelet coherence analysis on the Kahramanmaraş earthquakes”, IBR, vol. 55, no. 1, pp. 51–70, May 2026, doi: 10.26650/ibr.2026.55.1673694.

ISNAD

Söker, Fahrettin - Cihangir, Mehmet. “Reaction of Foreign Investors to Natural Disasters in the Stock Market: A Study With Least Squares and Wavelet Coherence Analysis on the Kahramanmaraş Earthquakes”. Istanbul Business Research 55/1 (May 1, 2026): 51-70. https://doi.org/10.26650/ibr.2026.55.1673694.

JAMA

1.Söker F, Cihangir M. Reaction of foreign investors to natural disasters in the stock market: A study with least squares and wavelet coherence analysis on the Kahramanmaraş earthquakes. IBR. 2026;55:51–70.

MLA

Söker, Fahrettin, and Mehmet Cihangir. “Reaction of Foreign Investors to Natural Disasters in the Stock Market: A Study With Least Squares and Wavelet Coherence Analysis on the Kahramanmaraş Earthquakes”. Istanbul Business Research, vol. 55, no. 1, May 2026, pp. 51-70, doi:10.26650/ibr.2026.55.1673694.

Vancouver

1.Fahrettin Söker, Mehmet Cihangir. Reaction of foreign investors to natural disasters in the stock market: A study with least squares and wavelet coherence analysis on the Kahramanmaraş earthquakes. IBR. 2026 May 1;55(1):51-70. doi:10.26650/ibr.2026.55.1673694