Death and contagious infectious diseases: Impact of the COVID-19 virus on stock market returns

Al-Awadhi, Abdullah M.; Alsaifi, Khaled; Al-Awadhi, Ahmad M.; Alhammadi, Salah

doi:10.1016/j.jbef.2020.100326

Cited by 1,123 publications

(1,170 citation statements)

References 15 publications

Supporting

114

Mentioning

1,013

Contrasting

Unclassified

Order By: Relevance

“…Our findings shed light on this observation and suggest that the provincial-level threats of public health play a substantial role in determining local firms’ market performance. Moreover, compared to the prior COVID-19 related studies based on the evidence from China’s market [ 3 ], this study uses a much larger sample to test the effect of continued increasing public health threats, which enhance the statistical power. Considering the limitations of the cross-country setting [ 2 , 4 , 7 , 24 ], this study supplements prior studies by focusing on one single market.…”

Section: Conclusion and Discussionmentioning

confidence: 99%

“…Second, for the single country studies, based on the statistical figure from India, Singh and Neog [ 25 ] illustrate that the COVID-19 outbreak leads to an economic contraction in terms of macro-economy, tourism, transportation, stock market, human capital, and trade. Al-Awadhi et al [ 3 ] use Chinese data and find that daily new confirmed COVID-19 cases and deaths negatively affect stock returns. Based on the U.S. daily data Sharif et al [ 26 ] show that COVID-19 leads to oil price volatility shock, economic policy uncertainty, and stock market volatility.…”

Section: Background Literature and Hypothesis Developmentmentioning

confidence: 99%

See 1 more Smart Citation

Risk Assessment on Continued Public Health Threats: Evidence from China’s Stock Market

2020

IJERPH

View full text Add to dashboard Cite

Given the disturbing effects of the coronavirus disease 2019 (COVID-19) outbreak, we are motivated to examine whether the continued increase of the provincial public health threats affects the firms’ accumulative abnormal return. Using the 178,805 firm-day observations from Chinese listed firms from 10 January to 31 March 2020, we find that the accumulative abnormal return is significantly lower among firms located in the provinces where face the continued increase of new confirmed COVID-19 cases. The relations remain constant after several robustness tests. These findings suggest that investors concern about the potential risk when firms are located in the provinces with higher threats to public health. We also find that the negative effect of increasing public health threats on abnormal return is weaker for firms surrounded by a provincial environment with stronger information accessibility and economic growth. Overall, this study extends the literature by presenting systematic evidence on the effect of the continued increase of provincial public health threats on the market reaction in Chinese listed firms.

show abstract

Section: Conclusion and Discussionmentioning

confidence: 99%

Section: Background Literature and Hypothesis Developmentmentioning

confidence: 99%

Risk Assessment on Continued Public Health Threats: Evidence from China’s Stock Market

2020

IJERPH

View full text Add to dashboard Cite

show abstract

“…Nozawa and Qiu [35] noticed that corporate bonds supplied by companies showing a strong link with China respond more to the quarantine of Wuhan at early 2020. Hence, M.Al-Awadhi, Alsaifi, Al-Awadhi and Alhammadi [29] concluded that the COVID-19 disease negatively influence stock market returns of the companies covered in the Hang Seng Index and Shanghai Stock Exchange Composite Index. Adenomon, Maijamaa and John [34] strengthened that the coronavirus disease negatively influences the stock returns in Nigeria.…”

Section: Earlier Studies Towards the Impact Of Covid-19 On Stock Marketsmentioning

confidence: 99%

Stock Market Reactions to COVID-19 Pandemic Outbreak: Quantitative Evidence from ARDL Bounds Tests and Granger Causality Analysis

Gherghina

Armeanu

Joldeș

2020

IJERPH

View full text Add to dashboard Cite

This paper examines the linkages in financial markets during coronavirus disease 2019 (COVID-19) pandemic outbreak. For this purpose, daily stock market returns were used over the period of December 31, 2019–April 20, 2020 for the following economies: USA, Spain, Italy, France, Germany, UK, China, and Romania. The study applied the autoregressive distributed lag (ARDL) model to explore whether the Romanian stock market is impacted by the crisis generated by novel coronavirus. Granger causality was employed to investigate the causalities among COVID-19 and stock market returns, as well as between pandemic measures and several commodities. The outcomes of the ARDL approach failed to find evidence towards the impact of Chinese COVID-19 records on the Romanian financial market, neither in the short-term, nor in the long-term. On the other hand, our quantitative approach reveals a negative effect of the new deaths’ cases from Italy on the 10-year Romanian bond yield both in the short-run and long-run. The econometric research provide evidence that Romanian 10-year government bond is more sensitive to the news related to COVID-19 than the index of the Bucharest Stock Exchange. Granger causality analysis reveals causal associations between selected stock market returns and Philadelphia Gold/Silver Index.

show abstract

“…Furthermore, the high uncertainty of Covid-19 and its negative impact on the real economy has increased the volatility in financial markets. Al-Awadhi et al (2020) provide fresh evidence on the Chinese stock markets response to the Covid-19 outbreak, spanning the period 10 January 2020 to 16 March 2020. To this end, they use panel data methods to examine the impact of Covid-19 on all stocks traded on both the Hang Seng and Shanghai Stock Exchange Composite indexes.…”

Section: Introductionmentioning

confidence: 99%

The role of Covid-19 for Chinese stock returns: evidence from a GARCHX model

Apergis

2020

Asia-Pacific Journal of Accounting & Economics

View full text Add to dashboard Cite

This paper examines the effect of Covid-19 pandemic on the Chinese stock market returns and their volatility using the generalized autoregressive conditionally heteroskedastic GARCHX model. The GARCHX model allows us to include Covid-19 information within the GARCH framework. The findings document that daily increases in total confirmed Covid-19 cases in China, measured as total daily deaths and cases, have a significant negative impact on stock returns, with the negative impact of the Covid-19 on stock returns being more pronounced when total deaths proxy the effect of this infectious disease. The results also document that Covid-19 has a positive and statistically significant effect on the volatility of these market returns. Overall, new evidence is offered that infectious diseases, such as Covid-19, can seriously impact market returns, as well as their volatility. The findings could be essential in understanding the implications of Covid-19 for the stock market in China.

show abstract

Death and contagious infectious diseases: Impact of the COVID-19 virus on stock market returns

Cited by 1,123 publications

References 15 publications

Risk Assessment on Continued Public Health Threats: Evidence from China’s Stock Market

Risk Assessment on Continued Public Health Threats: Evidence from China’s Stock Market

Stock Market Reactions to COVID-19 Pandemic Outbreak: Quantitative Evidence from ARDL Bounds Tests and Granger Causality Analysis

The role of Covid-19 for Chinese stock returns: evidence from a GARCHX model

Contact Info

Product

Resources

About