Sectoral effects of earthquakes on Istanbul Stock exchange

Given its geographical location, geological and historical background, Turkey is one of the earthquake-prone countries. These earthquakes have social, economic and environmental consequences. In our study, it is aimed to investigate the sectoral impact of earthquake in Borsa Istanbul after the 1999 Marmara Earthquake, 2011 Van earthquake, 2020 İzmir earthquake and 2023 Kahramanmaraş earthquake, which are earthquakes with a magnitude of 7 and above in the 25-year period between 1999 and 2023. In this study, five sectors are analyzed: tourism, food, real estate investment trust, nonmetal min. product and insurance sectors. Using the event study method, the significance of abnormal returns in the sectors after the earthquake was determined. In the regarding results obtained, it is seen that the sectors react differently to earthquakes. While negative significant abnormal returns were detected in the food, insurance and tourism sectors after the Marmara earthquake, positive significant abnormal returns were detected in the nonmetal min. product sector. In the Van earthquake, only the nonmetal min. product sector showed positive significant abnormal returns, while the abnormal returns of other sectors were not significant. In the sectoral analysis after the Izmir earthquake, the food, tourism and real estate investment trust sectors were negatively affected by the earthquake, while there was no effect on the insurance sector; in addition, the nonmetal min. product sector was positively affected. In the Kahramanmaraş earthquake, the food and insurance sectors were negatively affected, while the nonmetal min. product sector was positively affected, but no significant abnormal returns were detected in the tourism and real estate investment trust sectors.