The Impact of COVID-19 on Stock Markets

Economic and Political Studies 2020

19 Pages Posted: 19 Aug 2020

See all articles by Qing He

Qing He

Renmin University of China

Junyi Liu

Soka University of America

Sizhu Wang

Renmin University of China - School of Finance

Jishuang Yu

Renmin University of China - School of Finance

Date Written: April 1, 2020

Abstract

This paper attempts to explore the direct effects and spill-overs of COVID-19 on stock markets. Using conventional t-tests and non-parametric Mann-Whitney tests, we empirically analyse daily return data from stock markets in the People’s Republic of China, Italy, South Korea, France, Spain, Germany, Japan and the United States of America. Our empirical results show that (i) COVID-19 has a negative but short-term impact on stock markets of affected countries and that (ii) the impact of COVID-19 on stock markets has bidirectional spill-over effects between Asian countries and European and American countries. However, there is no evidence that COVID-19 negatively affects these countries’ stock markets more than it does the global average. The findings contribute to the research on economic impact of the pandemic by providing empirical evidence that COVID-19 has spill-over effects on stock markets of other countries. The results also provide a basis for assessing trends in international stock markets when the situation is alleviated worldwide.

Keywords: COVID-19, coronavirus disease, stock markets, spill-over effects

Suggested Citation

He, Qing and Liu, Junyi and Wang, Sizhu and Yu, Jishuang, The Impact of COVID-19 on Stock Markets (April 1, 2020). Economic and Political Studies 2020, Available at SSRN: https://ssrn.com/abstract=3676045 or http://dx.doi.org/10.2139/ssrn.3676045

Qing He

Renmin University of China ( email )

Room 705
Mingde main building
Beijing, Beijing 100872
China

Junyi Liu (Contact Author)

Soka University of America ( email )

1 University Dr
Aliso Viejo, CA 92656
United States
2179793599 (Phone)
92656 (Fax)

Sizhu Wang

Renmin University of China - School of Finance

Ming De Main Building
Renmin University of China
Beijing, Beijing 100872
China

Jishuang Yu

Renmin University of China - School of Finance ( email )

Ming De Main Building
Renmin University of China
Beijing, Beijing 100872
China

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