Abstract:
This paper examines on the linkage among stock indexes and transportation costs in global financial crisis. Therefore, we aim to find out whether Dow Jones Composite Average (DJA) and Istanbul Stock Exchange Industrial (BIST-Ind.) have causality relation with Baltic Dry Index (BDI) in 2007-2009 global financial crisis by performing Toda-Yamamoto (1995) causality test with weekly returns of indexes. Tests confirm unidirectional causality from BIST-Ind. to BDI and bidirectional causality between DJA and BDI. Test results show that BIST-Ind. decoupled from DJA in the 2008 global financial crisis when international maritime transportation cost are taken into account. Thus, the impact of international freight rates is influential over more globalized industrial stock markets.