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Do weather patterns effect investment decisions in the stock market? A South Asian perspective

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  • Emon Kalyan Chowdhury

    (Chittagong Independent University)

Abstract

Do weather patterns in South Asia have an impact on investment decisions? This question is particularly relevant given the region’s vulnerability to natural disasters such as floods, cyclones, and droughts. To explore this issue, we apply regression and generalized method of moments using yearly data of weather, stock indices, borrowing opportunity, economic growth, interest, and inflation rates from 1995 to 2021. Based on data availability, this study has taken Bangladesh, India, Pakistan, and Sri Lanka as sample countries. The research results indicate that weather significantly influences investment decisions and that consideration of weather factors can mitigate risk and enhance investment return.

Suggested Citation

  • Emon Kalyan Chowdhury, 2024. "Do weather patterns effect investment decisions in the stock market? A South Asian perspective," Journal of Asset Management, Palgrave Macmillan, vol. 25(2), pages 162-171, March.
    • Handle: RePEc:pal:assmgt:v:25:y:2024:i:2:d:10.1057_s41260-023-00334-z
    DOI: 10.1057/s41260-023-00334-z
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    More about this item

    Keywords

    Stock markets; Investor behavior; Weather; Investment decision; GMM;
    All these keywords.

    JEL classification:

    • D25 - Microeconomics - - Production and Organizations - - - Intertemporal Firm Choice: Investment, Capacity, and Financing
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • R53 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Public Facility Location Analysis; Public Investment and Capital Stock

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