The relationship between weather condition reports and stock food and beverage indices : an application for the food and beverage index of Istanbul stock exchange

Abstract

Several studies exist in the literature to analyze the effect of weather conditions on finance field. As an addition to the mentioned ones, in the study; the relationship between the weather condition reports and Istanbul Stock Exchange Food and Beverage Index is examined. For this reason, the daily data of weather conditions of Turkey from August 2013 to November 2015 besides closing prices of the Food and Beverage Index are benefited. As climatic factors like weather conditions are suggested to affect the amount of the agricultural products and their prices; the condition reports are assumed to cause volatility in cases such as costs in addition to financial structures of the companies listed on the index. Hence; the effect of mentioned factors on profitability and market value of the firms are tried to be revealed. Johansen ve Juselius Cointegration tests are run between the average temperature and daily closing prices data in advance and long term relationship is revealed between the variables in the study. Therefore; Vector Error Correction Model to indicate the short term effect of the relation is used so that findings are shown to obtain the balance for the deviation of short term deviation.