COVID-19 pandemic and capital markets: the role of government responses

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dc.contributor.authorBeer, Christian
dc.contributor.authorManiora, Janine
dc.contributor.authorPott, Christiane
dc.date.accessioned2023-08-23T08:43:25Z
dc.date.available2023-08-23T08:43:25Z
dc.date.issued2022-07-07
dc.description.abstractThis paper analyzes the moderation effect of government responses on the impact of the COVID-19 pandemic, proxied by the daily growth in COVID-19 cases and deaths, on the capital market, i.e., the S&P 500 firm’s daily returns. Using the Oxford COVID-19 Government Response Tracker, we monitor 16 daily indicators for government actions across the fields of containment and closure, economic support, and health for 180 countries in the period from January 1, 2020 to March 15, 2021. We find that government responses mitigate the negative stock market impact and that investors’ sentiment is sensitive to a firm’s country-specific revenue exposure to COVID-19. Our findings indicate that the mitigation effect is stronger for firms that are highly exposed to COVID-19 on the sales side. In more detail, containment and closure policies and economic support mitigate negative stock market impacts, while health system policies support further declines. For firms with high revenue exposure to COVID-19, the mitigation effect is stronger for government economic support and health system initiatives. Containment and closure policies do not mitigate stock price declines due to growing COVID-19 case numbers. Our results hold even after estimating the spread of the pandemic with an epidemiological standard model, namely, the susceptible-infectious-recovered model.en
dc.identifier.urihttp://hdl.handle.net/2003/42072
dc.identifier.urihttp://dx.doi.org/10.17877/DE290R-23905
dc.language.isoende
dc.relation.ispartofseriesJournal of business economics;93(1-2)
dc.rights.urihttps://creativecommons.org/licenses/by/4.0/de
dc.subjectCOVID-19en
dc.subjectGovernment policiesen
dc.subjectInvestor sentimenten
dc.subjectCapital marketen
dc.subjectSales revenueen
dc.subjectBehavioral financeen
dc.subject.ddc330
dc.subject.rswkCOVID-19de
dc.subject.rswkKapitalmarktde
dc.subject.rswkRegierungde
dc.subject.rswkKapitalanlegerde
dc.subject.rswkUmsatzde
dc.titleCOVID-19 pandemic and capital markets: the role of government responsesen
dc.typeTextde
dc.type.publicationtypeArticlede
dcterms.accessRightsopen access
eldorado.secondarypublicationtruede
eldorado.secondarypublication.primarycitationBeer, C., Maniora, J. & Pott, C. COVID-19 pandemic and capital markets: the role of government responses. J Bus Econ 93, 11–57 (2023). https://doi.org/10.1007/s11573-022-01103-xde
eldorado.secondarypublication.primaryidentifierhttps://doi.org/10.1007/s11573-022-01103-xde

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