A1 Journal article (refereed), original research

The financial cost of rivalry: A tale of two South-Asia neighbors


LUT Authors / Editors

Publication Details
Authors: Ahmed Sheraz, Hussain Syed Mujahid
Publication year: 2014
Language: English
Related Journal or Series Information: Emerging Markets Finance and Trade
Volume number: 50
Issue number: 3
Start page: 35
End page: 60
JUFO-Level of this publication: 1
Open Access: Not an Open Access publication

Abstract
We examine the effect of bilateral political and military news on the returns and volatility of the stock markets of India and Pakistan. Our results show that the volatility of both stock markets shows a significant reaction on the arrival of news related to military aggression in a reciprocal way. Moreover, while the volatility of India's stock market seems to show a subdued response to bilateral political news, Pakistan's stock market appears to be sensitive to both political and military news originating from either country. The relatively stronger effect of military events can be attributed to a higher financial cost of confrontation between the two countries.

Last updated on 2017-22-03 at 14:36