Impact of COVID-19 pandemic disease outbreak on the global equity markets

The price of a stock rises or falls in relation to a number of different factors, including changes to the economy brought about by pandemics. A few studies have already identified the effect of the COVID-19 pandemic on the stock market. However, empirical evidence is lacking on changes in stock price performance of blockchain-based companies as a result of the COVID-19 pandemic. We use the event study approach to estimate stock expected returns by applying an asset pricing model over a thirty-day event window around the announcement on March 11, 2020 by the World Health Organization (WHO) regarding the outbreak of the coronavirus (COVID-19) as a global pandemic, using a sample of S&P Global 1200 companies. Overall, our results indicate more sensitivity in blockchain-based companies' stock prices to the COVID-19 pandemic compared to those of non-blockchain-based companies. Cumulative abnormal returns show that the stock price of blockchain-based companies recover losses slower than nonblockchain companies. Our findings are important for investors and shareholders for future pandemics and events.

Section: Discussionsupporting

confidence: 92%

Effects of the COVID-19 pandemic on stock price performance of blockchain-based companies

Kordestani

Pashkevich

Oghazi

et al. 2021

“…Many studies analyze the impact of the COVID-19 pandemic on businesses (Amankwah-Amoah et al, 2021;Bacq et al, 2020;Budda et al, 2020;Carracedo et al, 2020;Eggers, 2020;Krishnamurthy, 2020;Lin & Zhang, 2020;Mullins, 2020;Sharma et al, 2020;Anker, 2021;El-Sheekh & Hassan, 2021;Hossain, 2021;Shaikh, 2020;Mirza et al, 2020a;Agrawal, 2020;Rizvi et al, 2020a;Teng et al, 2021).…”

Section: Literature Reviewmentioning

confidence: 99%

The impact of covid-19 on financial management: evidence from Romania

Achim

Safta

Văidean

et al. 2021

The COVID-19 pandemic has disrupted every facet of life globally. Business and commerce are key areas where the monetary crunch has been acutely felt. This study aims to analyze the various key changes in entities' activities to evaluate the level of business performance in response to the COVID-19 pandemic. For this purpose, we use panel data analysis on 218 Romanian listed companies of different sizes (big and small) and belonging to different business sectors for the period June 30, 2019-June 30, 2020. We find that the net profits of the overall market decreased by 37.43% over the analyzed period. However, small companies engaged in agriculture, commerce, construction, IT R&D, and transport and storage witnessed better financial performance. In addition, our results show that equity financing, proper liquidity management, and an increased company size consolidate the economic performance of entities regarding return on equity and return on assets. Our findings are useful for policymakers such as managers and investors and can help them make the best decision for their managing or investing activities. Moreover, governments need to know how companies respond to the pandemic to identify the sectors of activity that are more vulnerable to the crisis' effects and the main financial management decisions that must be adopted by companies during times of crises.

“…Therefore, COVID-19 has become a grave concern for the world population and economies. The adverse impacts of pandemics, epidemics, economic crisis, a natural disaster on different macroeconomic variables is not a new phenomenon, and numerous literature supports it, for example, Fasanya et al (2020); McKibbin and Fernando (2020); and Shaikh (2020).…”

Section: Introductionmentioning

confidence: 99%

COVID-19 pandemic and unemployment dynamics in European economies

Dai

Ullah

et al. 2021

122

This study goal to scrutinize the influences of the COVID-19 pandemic on unemployment in five selected European economies. To this end, the study uses a Fourier causality test for the period of December-2019 to December-2020. In Z-test results, Germany, Spain, and the UK have a significant positive change in unemployment due to COVID-19. The finding shows that COVID-19 cases cause unemployment for Germany, Italy, and the UK. Moreover, in terms of deaths, COVID-19 also causes unemployment in Italy and UK. Overall, the study's outcomes highlight that the pandemic increases the unemployment rate robustly in the mostly European economies. That is one of the rare negative effects of the virus on the European labor market. Novel COVID-19 findings provide a reliable guide to the future policy implication for the labor market. An active labor market policy will be needed to be in front of the world urgently.