The 2010 Chilean earthquake and tsunami were among the strongest in the world history. The exogeneity of these natural disasters provides the opportunity to test stock price reactions. Using a sample of 42 firms listed in the Santiago Stock Exchange, we develop an event study methodology considering heterogeneity in volatility. Chilean stock market volatility
increased by 240% (120%) during the 5 (11) trading days after the earthquake. The results are informative about the behavior of the stock prices: returns are positive in sectors the retail, real estate, and banking sectors and negative in food, steel, and forestry. Insurance coverage decreases the impact on economic growth.
Ruiz, J. L., & Barrero, M. (2014). The Effects of the 2010 Chilean Natural Disasters on the Stock Market. Estudios De Administración, 21(1), 31–48. https://doi.org/10.5354/0719-0816.2014.56396
