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War-related risks and the Ýstanbul bourse on the eve of the First World War

Author

Listed:
  • Avni Onder Hanedar
  • Erdost Torun
  • Elmas Yaldiz Hanedar

Abstract

The lack of well-documented information in the historical literature on the relationship between war-related expectations and their effects on the bond market in the Ottoman Empire motivates this paper's three contributions. First, this paper is the first empirical study to investigate the break points in the volatility of Ottoman bond prices from a historical point of view. Second, we use the econometric technique developed by Inclan and Tiao (1994) to identify the structural breaks. Last, we use a manually collected dataset from the daily newspapers of the time on daily Ottoman bond prices from 1910 to 1914. Subsequently, we identify five structural break dates, each of them corresponding to important war-related events. When we investigate the commentaries in the Ottoman newspapers, we see that the outbreak of several wars might not have been a surprise for investors in the Ottoman Empire, as reflected by government bond prices.

Suggested Citation

  • Avni Onder Hanedar & Erdost Torun & Elmas Yaldiz Hanedar, 2015. "War-related risks and the Ýstanbul bourse on the eve of the First World War," Borsa Istanbul Review, Research and Business Development Department, Borsa Istanbul, vol. 15(3), pages 205-212, September.
    • Handle: RePEc:bor:bistre:v:15:y:2015:i:3:p:205-212
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    Citations

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    Cited by:

    1. Hanedar, Avni Önder & Hanedar, Elmas Yaldız, 2017. "Ottoman stock returns during the Turco-Italian and Balkan Wars of 1910-1914," eabh Papers 17-02, The European Association for Banking and Financial History (EABH).
    2. Avni önder Hanedar & Talat Ulussever & Murat Ertuğrul, 2018. "Identifying the Default: The Ottoman Empire and the İstanbul Bourse in the nineteenth century," Working Papers 2018/1, Turkish Economic Association.
    3. Piotr Fiszeder & Marta Ma³ecka, 2022. "Forecasting volatility during the outbreak of Russian invasion of Ukraine: application to commodities, stock indices, currencies, and cryptocurrencies," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 17(4), pages 939-967, December.

    More about this item

    Keywords

    The Turco-Italian war; Ottoman government bonds; Inclan-Tiao test;
    All these keywords.

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • N25 - Economic History - - Financial Markets and Institutions - - - Asia including Middle East
    • N45 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Asia including Middle East

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