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

Kang Hua Cao; Qiqi Li; Yun Liu; Chi-Keung Woo

doi:10.1080/13504851.2020.1803481

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 journal › Journal article › peer-review

58 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 language	English
Pages (from-to)	1157-1161
Number of pages	5
Journal	Applied Economics Letters
Volume	28
Issue number	14
Early online date	6 Aug 2020
DOIs	https://doi.org/10.1080/13504851.2020.1803481
Publication status	Published - 16 Aug 2021

User-Defined Keywords

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

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1080/13504851.2020.1803481

Cite this

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title = "Covid-19{\textquoteright}s adverse effects on a stock market index",

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{\textquoteright}s negative responsiveness to Covid-19{\textquoteright}s spread variations. We find that a stock market index{\textquoteright}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{\textquoteright}s local and non-local spreads, international efforts of containment are expected to pare stock market losses.",

keywords = "Covid-19, daily stock market index, market index elasticities, panel data analysis",

author = "Cao, \{Kang Hua\} and Qiqi Li and Yun Liu and Chi-Keung Woo",

note = "Funding Information: C.K. Woo{\textquoteright}s research is funded by research grants (\#4388 and \#4400) from the Education University of Hong Kong. Without implications, all errors are ours. ",

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doi = "10.1080/13504851.2020.1803481",

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AU - Li, Qiqi

AU - Liu, Yun

AU - Woo, Chi-Keung

N1 - Funding Information: C.K. Woo’s research is funded by research grants (#4388 and #4400) from the Education University of Hong Kong. Without implications, all errors are ours.

PY - 2021/8/16

Y1 - 2021/8/16

N2 - 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.

AB - 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.

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KW - daily stock market index

KW - market index elasticities

KW - panel data analysis

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JO - Applied Economics Letters

JF - Applied Economics Letters

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ER -

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

Abstract

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UN SDGs

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