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Is political risk still an issue for Turkish stock market?

Author

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  • Samet Gunay

Abstract

In this study, we analyze the effects of internal political risk on the Turkish stock market in the period of 2001–2014. Empirical analyses are conducted through various methods to obtain breaks and regimes in the return volatilities of the BIST100 index. According to the results, while the number of breaks has increased in recent years, the risk level of recent periods is significantly lower than the early regimes, and the risk level trend for all regimes show a negative slope. In conclusion, the Turkish stock market responds to political events, but according to our results, not as significantly as in the past.

Suggested Citation

  • Samet Gunay, 2016. "Is political risk still an issue for Turkish stock market?," Borsa Istanbul Review, Research and Business Development Department, Borsa Istanbul, vol. 16(1), pages 21-31, March.
    • Handle: RePEc:bor:bistre:v:16:y:2016:i:1:p:21-31
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    File URL: http://www.sciencedirect.com/science/article/pii/S2214845015300168
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    Citations

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    Cited by:

    1. Yener Cos‚kun & A. Sevtap Selcuk-Kestel & Bilgi Yilmaz, 2017. "Diversification benefit and return performance of REITs using CAPM and Fama-French: Evidence from Turkey," Borsa Istanbul Review, Research and Business Development Department, Borsa Istanbul, vol. 17(4), pages 199-215, December.
    2. Dervis Kirikkaleli, 2020. "Does political risk matter for economic and financial risks in Venezuela?," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 9(1), pages 1-10, December.

    More about this item

    Keywords

    Political risk; Turkish stock market; Financial stability; Volatility breaks;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • F59 - International Economics - - International Relations, National Security, and International Political Economy - - - Other
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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