Covid-19’s adverse effects on a stock market index

Kang Hua Cao*, Qiqi Li, Yun Liu, Chi-Keung Woo

*Corresponding author for this work

    Research output: Contribution to journalJournal articlepeer-review

    47 Citations (Scopus)

    Abstract

    We perform a panel data analysis of 14 daily stock market indices during 01/21/2020–06/30/2020 to document a stock market index’s negative responsiveness to Covid-19’s spread variations. We find that a stock market index’s elasticity estimate is −0.028 (p-value <0.01) for local cumulative confirmed cases. As a stock market index tends to move with Covid-19’s local and non-local spreads, international efforts of containment are expected to pare stock market losses.

    Original languageEnglish
    Pages (from-to)1157-1161
    Number of pages5
    JournalApplied Economics Letters
    Volume28
    Issue number14
    Early online date6 Aug 2020
    DOIs
    Publication statusPublished - 16 Aug 2021

    Scopus Subject Areas

    • Economics and Econometrics

    User-Defined Keywords

    • Covid-19
    • daily stock market index
    • market index elasticities
    • panel data analysis

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