Does Weather Has Same Effect on Different Countries Stock Market Return

Sayed Kifayat Shah, Yang Yiwen, Farman Ali


In the field of behavioral finance mood, emotions and other different effecting factors have been investigated regarding stock market return. Weather is one of the most important and vital factor that has been analyzed. In this empirical study the two different stock exchanges (Eastern Asian and South Asian) are compared with respect to the weather variable temperature. The analysis and investigation has been made by utilizing the six years record of both stock exchange (China, Pakistan) indexes (SSE-180, KSE 100). The Autoregressive (AR) Conditional Heteroscedasticity (GARCH) technique has been utilized for analysis. It has been found that temperature is the most affecting factor that has negative effect on both stock exchanges. The effect of temperature on both stock exchanges has been compared and found that Eastern Asian Country have more effect as compared South Asian country. The results are given in detail by using Eviews Package.

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