Measuring the impact of COVID‐19 on stock prices and profits in the food supply chain

Abstract

The coronavirus disease 2019 pandemic has shocked financial and commodity markets around the world. We are analyzing stock prices and information from financial reports to examine the impact of the pandemic on stock price volatility and profits of companies in the food supply chain. We use a data set of 71 major listed companies in the food value chain from stock indices in the US, Japan, and Europe. We calculate the annualized volatility per sector, screen the contents of the reports for stated effects of the pandemic on profits, and analyze stock price reactions in four different phases of the pandemic. The results show that stock markets have reacted with an increased price volatility. Manufacturers of fertilizers and agrochemicals as well as food distributors show particularly high volatilities in their stock prices. Low price volatility was observed in the stocks of food retailers. This pattern is also reflected in the profits of companies published in financial reports. Our regression analyses indicate that stocks of more profitable companies exhibited higher cumulative returns during the outbreak. In the phases thereafter, riskier stocks received higher discounts on returns. EconLit citations: G01, G12, E44, Q01.

Impact of COVID-19 on vegetable supply chain and food security: Empirical evidence from Bangladesh

“…Though farmers are impacted by COVID-19 in many ways, dropping income appears to have had the most damaging effect. Poor households are adjusting to income shocks by consuming less nutritious food and more cereals, and turning to public food relief programs for their survival [ 25 ]. A prolonged consumption of less nutritious food might make them prone to ill health/sickness which may ultimately lead to missed work and a further cycle of poverty.…”

COVID-19 Pandemic and Romanian Stock Market Volatility: A GARCH Approach

“…For instance, Milcheva (2021) noticed that the most affected segments in the US are retail and hotels, but in Asia the most affected segment is the office. Nevertheless, Höhler and Lansink (2021) noted that the food sector was less influenced by the pandemic than other segments.…”

“…Prior papers were focused on volatility examination for African equity markets (Lo et al 2021;Takyi and Bentum-Ennin 2021;Zoungrana et al 2021), the Australian stock market (Brueckner and Vespignani 2021), BRICS and G7 states (Yu et al 2021), Canada and the US (Xu 2021), the Chinese stock market (Chen et al 2021;Liu et al 2021b;Shahzad et al 2021), seven emerging countries (Hashmi et al 2021), euro area stock markets (Duttilo et al 2021), the Indian financial market (Bora and Basistha 2021), the South Korea stock market (Hoshikawa and Yoshimi 2021), Thailand (Hongsakulvasu et al 2020), the Tunisian sectorial stock market (Fakhfekh et al 2021), the US stock market (Curto and Serrasqueiro 2021;Hong et al 2021), Vietnam and Philippines (Le and Tran 2021), Visegrad Group member states (Czech et al 2020), or several international markets (Al-Najjar et al 2021;Al-Qudah and Houcine 2021;Anser et al 2021;Banerjee 2021;Chowdhury et al 2021;Contessi and Pace 2021;Engelhardt et al 2021;Höhler and Lansink 2021;Rouatbi et al 2021;Szczygielski et al 2021b;Topcu and Gulal 2020;Vera-Valdés 2021;Youssef et al 2021;Zhang et al 2020). This paper aims to examine the volatility throughout the Romanian financial market during the COVID-19 pandemic.…”

Causal Impacts of Epidemics and Pandemics on Food Supply Chains: A Systematic Review

“…Supply and demand fluctuation, in general, can trigger instability of inventory levels [55] since most organizations are not prepared to operate in crisis and emergency scenarios. Consequently, companies in all sectors are targets of financial losses and increases in operating costs [29,53,54,[56][57][58], adverse effects for business growth and productivity [57,59,60], delays and interruptions for the delivery of products, and problems in packaging materials [38].…”

“…Fluctuation in supply and demand [5,7,8,14,25,28,29,[36][37][38][39]41,[46][47][48]50,54,57,60,63,64,74,76,[78][79][80][81]84,92,93,[100][101][102][105][106][107][108]111,114,118,123,125,131,132,137,139,142,144,146,149,155,159,…”