The Global Impact of COVID-19 on Financial Markets

Abstract

This paper hypothesizes that the number of novel coronavirus disease (COVID-19) cases significantly influence the stock returns in international financial markets. Our empirical evidence, based on panel Granger non-causality tests, strongly supports this hypothesis for Group of Seven (G7) countries. This also adds to the growing literature on the impact of non-economic variables on financial markets, from the perspective of diseases.

Keywords: COVID-19, Cross-section dependence, Panel bootstrap causality, Stock market return

JEL Classification: C23, G12, G14, G15