Feverish Stock Price Reactions to Covid-19

61 Pages Posted: 25 Mar 2020 Last revised: 29 Jun 2020

See all articles by Stefano Ramelli

Stefano Ramelli

University of St. Gallen - School of Finance; Swiss Finance Institute

Alexander F. Wagner

University of Zurich - Department of Finance; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI); Swiss Finance Institute

Multiple version iconThere are 2 versions of this paper

Date Written: March 2020


The market reactions to the 2019 novel Coronavirus disease (COVID-19) provide new insights into how real shocks and financial policies drive firm value. Initially, internationally-oriented firms, especially those more exposed to trade with China, underperformed. As the virus spread to Europe and the US, corporate debt and cash holdings emerged as important value drivers, relevant even after the Fed intervened in the bond market. The content and tone of conference calls mirror this development over time. Overall, the results illustrate how the anticipated real effects from the health crisis, a rare disaster, were amplified through financial channels.

Keywords: Coronavirus, Corporate Debt, COVID-19, event study, global value chains, leverage, Pandemic, SARS-CoV-2, Supply Chains, tail risk

JEL Classification: F15, F23, F36, G01, G02, G14, G15

Suggested Citation

Ramelli, Stefano and Wagner, Alexander F., Feverish Stock Price Reactions to Covid-19 (March 2020). CEPR Discussion Paper No. DP14511, Available at SSRN: https://ssrn.com/abstract=3560319

Stefano Ramelli (Contact Author)

University of St. Gallen - School of Finance ( email )

Unterer Graben 21
St. Gallen, 9000

Swiss Finance Institute ( email )

c/o University of Geneva
40, Bd du Pont-d'Arve
CH-1211 Geneva 4

Alexander F. Wagner

University of Zurich - Department of Finance ( email )

Plattenstr 32
Zurich, 8032

Centre for Economic Policy Research (CEPR) ( email )

United Kingdom

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels

Swiss Finance Institute ( email )


HOME PAGE: http://www.alex-wagner.com

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