The Impact of the COVID-19 Pandemic on Investor Risk Tendency: The Case of Turkey

Abstract

Introduction and Aim: It is an important issue that what kind of changes occur in the risks that people face in the face of emerging problems and the role of people in possible pandemics in the last twenty years and in the future. The solution of the problems that arise in the control and management of these risks attracts the attention of many researchers. In this study, the causality effect of the COVID-19 pandemic on risk appetites representing the attitudes and behaviors of securities investors. Materials and Methods: In the study; To represent the pandemic, weekly time series data of the number of COVID-19 cases (COVID) and the Risk Appetite index (RISK) announced by the Central Registry Agency for the period 30.03.2019-30.08.2021 were used. In order to determine the causality relationship, the Hatemi-J Causality test was performed. Results: It was determined that the negative shocks of the COVID variable were a cause of the positive shocks of the RISK variable at a statistical significance level of 1%. Conclusion and Suggestions: The effect of the pandemic process on the investment decisions of the investors is reduced, with the expectation that the economy and financial markets will improve, positively affecting the behavior and risk perceptions of the investors, and this expectation causes the investment behavior and risk appetite to increase. can be expressed.