Authors: Rayenda Khresna Brahmana; Chee-Wooi Hooy; Zamri Ahmad
Addresses: Faculty of Economics and Business, Universiti Malaysia Sarawak, Kota Samarahan, Sarawak, Malaysia ' Finance Cluster, School of Management, Universiti Sains Malaysia, Minden, 11800, Malaysia ' Finance Cluster, School of Management, Universiti Sains Malaysia, Minden, 11800, Malaysia
Abstract: Several studies have been employed to discuss the link between weather and market returns. However, our research is different in three ways. We employed in tropical country, added extreme condition, and covering the entire Indonesia weather proportionally. This paper revisits the weather-induced moods effect on economic behaviour and found that weather condition, namely temperature level, and clouds cover has no influences on market returns and trading volume over period from 1999 to 2012. This research does not find any evidence of a link between temperature and market return because the tropical situation in Indonesia. However, cloud cover has an effect on the market; implying a role of affection bias in investor behaviour.
Keywords: tropical weather; Indonesia; stock markets; trading volume; market returns; investor behaviour; temperature level; cloud cover; affection bias.
Global Business and Economics Review, 2015 Vol.17 No.2, pp.188 - 202
Available online: 17 Mar 2015 *Full-text access for editors Access for subscribers Purchase this article Comment on this article