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The 2011 Japanese earthquake, tsunami and nuclear crisis: evidence of contagion from international financial markets

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  • Simplice A., Asongu

Abstract

Natural disasters may inflict significant damage upon international financial markets. Using 33 international stock indexes and exchange rates, this paper examines if any contagion occurred across financial markets after the March 11, 2011 Japanese earthquake, tsunami and nuclear crisis. Using heteroscedasticity biases based on correlation coefficients, findings reveal that: while no sampled foreign exchange market suffered from contagion, stock markets of Taiwan, Bahrain, Saudi Arabia and South Africa witnessed a contagion effect. Our results have two paramount implications. Firstly, we have confirmed existing consensus that in the face of natural crises that could take an international scale, emerging markets are contagiously affected for the most part. Secondly, we have also shown that international financial market transmissions not only occur during financial crisis; natural disaster effects should not be undermined.

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  • Simplice A., Asongu, 2011. "The 2011 Japanese earthquake, tsunami and nuclear crisis: evidence of contagion from international financial markets," MPRA Paper 31174, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:31174
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    Cited by:

    1. Guangxi Cao & Wei Xu & Yu Guo, 2015. "Effects of climatic events on the Chinese stock market: applying event analysis," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 77(3), pages 1979-1992, July.
    2. Simplice A, Asongu, 2011. "Political crises and risk of financial contagion in developing countries: Evidence from Africa," MPRA Paper 37459, University Library of Munich, Germany.
    3. Valizadeh, Pourya & Karali, Berna & Ferreira, Susana, 2017. "Ripple effects of the 2011 Japan earthquake on international stock markets," Research in International Business and Finance, Elsevier, vol. 41(C), pages 556-576.
    4. Jacques Jaussaud & Julien Martine & Serge Rey, 2012. "Japon : pistes pour l’analyse des conséquences économiques et managériales du Grand Tremblement de Terre du 11 mars 2011," Working papers of CATT hal-01880346, HAL.
    5. Samba Diop & Simplice A. Asongu & Vanessa S. Tchamyou, 2021. "Mitigating the Macroeconomic Impact of Severe Natural Disasters in Africa: Policy Synergies," Working Papers 21/094, European Xtramile Centre of African Studies (EXCAS).
    6. Asongu Simplice, 2013. "Globalization and Financial Market Contagion: Evidence from Financial Crisis and Natural Disasters," Working Papers of the African Governance and Development Institute. 13/035, African Governance and Development Institute..
    7. Simplice A ASONGU, 2012. "Globalization Financial Crisis And Contagion Time Dynamic Evidence From Financial Markets Of Developing Countries," Journal of Advanced Studies in Finance, ASERS Publishing, vol. 3(2), pages 131-139.
    8. Ishmael Ackah & Freda Opoku & Sarah Anang, 2019. "Switching on an Environmentally Friendly and Affordable Light in Africa: Evaluation of the Role of Natural Gas," Insight on Africa, , vol. 11(1), pages 60-77, January.
    9. Nakano, Shuhei & Hirata, Yoshito & Iwayama, Koji & Aihara, Kazuyuki, 2015. "Intra-day response of foreign exchange markets after the Tohoku-Oki earthquake," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 419(C), pages 203-214.
    10. Sedegah Kordzo & Odhiambo Nicholas M., 2021. "A Review of the Impact of External Shocks on Monetary Policy Effectiveness in Non-WAEMU Countries," Studia Universitatis „Vasile Goldis” Arad – Economics Series, Sciendo, vol. 31(3), pages 37-59, September.
    11. Jacques Jaussaud & Julien Martine & Serge Rey, 2012. "Japon : pistes pour l’analyse des conséquences économiques et managériales du Grand Tremblement de Terre du 11 mars 2011," Working papers of CATT hal-01880346, HAL.

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    More about this item

    Keywords

    Japanese Earthquake; Contagion; International Financial Markets;
    All these keywords.

    JEL classification:

    • F30 - International Economics - - International Finance - - - General
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)

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