Does Partisanship Shape Investor Beliefs? Evidence from the COVID-19 Pandemic

Cookson, J. Anthony; Engelberg, Joseph; Mullins, William

doi:10.1093/rapstu/raaa018

Cited by 78 publications

(20 citation statements)

References 41 publications

(43 reference statements)

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“…However, the research findings of Cookson et al [ 13 ] were contrary to reality in different financial markets. The findings showed that the financial markets of China remained robust and stable irrespective of the pandemic.…”

Section: Introductionmentioning

confidence: 88%

Stock Market Reaction to COVID-19: Evidence in Customer Goods Sector with the Implication for Open Innovation

Machmuddah

Utomo

Suhartono

et al. 2020

Journal of Open Innovation: Technology, Market, and Complexity

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The coronavirus pandemic has spread all over the world, affecting both the health and economic sectors. The aim of this research was to observe stock prices of customer goods before and after the COVID-19 pandemic using event study and the comparison test. The sample included data of daily closing stock prices and volume of stock trade during the three months before (−90 days) and after (+90 days) the occurrence of the COVID-19 pandemic ongoing, totaling 2670 observation data both before and after the COVID-19 pandemic, for a total of 5340. The research findings indicate a significant difference between the daily closing stock price and volume of stock trade before and after the COVID-19 pandemic. The current research has both theoretical and practical implications: the findings strengthen the efficient market hypothesis, which states that the more complete the provided information, the more efficient the market. The practical implication is that investors should be careful when choosing to invest. Investors should choose customer goods sector companies that provide products that are much needed by customers, for example, pharmacy, food, beverages, etc. Future research is needed to investigate the long-term impact of the pandemic on the economy.

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Section: Introductionmentioning

confidence: 88%

Stock Market Reaction to COVID-19: Evidence in Customer Goods Sector with the Implication for Open Innovation

Machmuddah

Utomo

Suhartono

et al. 2020

Journal of Open Innovation: Technology, Market, and Complexity

View full text Add to dashboard Cite

show abstract

“…Yan et al (2020) propose a profitable investment strategy for the stocks in the affected industries. Cookson et al (2020) examine the relationship between partisanship and investor beliefs in the US market in the context of the COVID-19 outbreak. However, few studies investigate the stock market response to information in the context of such an exogenous crisis.…”

Section: Introductionmentioning

confidence: 99%

COVID‐19, public attention and the stock market

Chen

Zhang

et al. 2020

Accounting & Finance

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This paper investigates the impact of coronavirus disease 2019 (COVID‐19) on the Chinese stock market. We show that the COVID‐19 outbreak not only hurts the stock returns but also affects the stock price sensitivity to firm‐specific information. We document heterogeneous effects of the epidemic infection scale and the public attention about the pandemic. The stock market response to firm‐specific information is decelerated (accelerated) by the public attention (infection scale). Moreover, the decreasing (increasing) effect of the public attention (infection scale) on such response is more intensive to positively toned (negatively toned) firm‐specific news articles. Finally, we observe price reversal (momentum) following the public attention (infection scale).

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“…(O'Donnell et al 2021) investigates the stock market in five regional epicenters, plus the MSCI World Index, reveals total cases of COVID-19 explain changes in stock prices in Spain, Italy, Britain, and the United States, but not in China and world stock indices. In contrast, Cookson et al (2020) find evidence that the COVID-19 pandemic has no effect on the stock market in China, and the Vietnamese government's decision to lockdown to prevent the spread of COVID-19 has a positive and significant impact on the stock market.…”

Section: Introductionmentioning

confidence: 80%

GARCH (1,1) Models and Analysis of Stock Market Turmoil during COVID-19 Outbreak in an Emerging and Developed Economy

Setiawan

Abdallah

Fekete-Farkas

et al. 2021

JRFM

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COVID-19 pandemic has led to uncertainties in the financial markets around the globe. The pandemic has caused volatilities in the financial market at varying magnitudes, in the emerging versus developed economy. To examine this phenomenon, this study investigates the impact of COVID-19 pandemic on stock market returns and volatility in an emerging economy, i.e., Indonesia, versus developed country, i.e., Hungary, using an event-study approach methodology utilizing GARCH (1,1) model. In this study, the Jakarta Composite Index (JCI) and the b (BUX) data were obtained from Investing and Bloomberg, covering two global events observed within the selected period from 27 September 2006 to 31 August 2021. The data is compared with the stock market volatility data from the global financial crisis in 2007/08. Findings reveal that the recent COVID-19 pandemic had negative stock market returns at a greater magnitude compared to the global financial crisis, in both the emerging and developed economy’s equity market. Stock markets in Indonesia and Hungary have experienced volatility during the crisis. While comparing the result between COVID-19 and the global financial crisis, we found that the volatility on the stock markets is higher in the COVID-19 pandemic than during the global financial crisis. The higher stock market negative returns and volatility during the COVID-19 pandemic triggered the lockdown and limited economic activities, which impacted supply and demand shock. The virus’s propagation and mutation are continually evolving, reminding us that the pandemic is far from over. Developed countries with larger fiscal space seem to find it easier to make responsive policies than countries with a tighter financial budget. Fiscal and monetary policies seem to be a quick solution to stabilize the economy and maintain investor confidence in the Indonesian and Hungarian capital markets. Furthermore, the extension of stock market volatility understanding ensures relevant information for investors, which benefits to mitigate the risk and build sustainable investments of the unprecedented events and enables the promotion of Sustainable Development Goal number 8 (SDG8) to communities, with access to financial products including the stock market, especially during economic and financial uncertainties.

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Does Partisanship Shape Investor Beliefs? Evidence from the COVID-19 Pandemic

Cited by 78 publications

References 41 publications

Stock Market Reaction to COVID-19: Evidence in Customer Goods Sector with the Implication for Open Innovation

Stock Market Reaction to COVID-19: Evidence in Customer Goods Sector with the Implication for Open Innovation

COVID‐19, public attention and the stock market

GARCH (1,1) Models and Analysis of Stock Market Turmoil during COVID-19 Outbreak in an Emerging and Developed Economy

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