COVID-19, Government Policy Responses, and Stock Market Liquidity around the World: A Note

18 Pages Posted: 24 Jun 2020 Last revised: 3 Aug 2020

See all articles by Adam Zaremba

Adam Zaremba

Montpellier Business School; Poznan University of Economics and Business

⸹ David Y. Aharon

Ono Academic College

Ender Demir

Istanbul Medeniyet University

Renatas Kizys

University of Southampton, Southampton Business School, Department of Banking and Finance

Dariusz Zawadka

Poznan University of Economics - Department of Investment and Capital Markets

Date Written: Apirl 23, 2020

Abstract

Unprecedented non-pharmaceutical interventions targeted to curb the spread of COVID-19 exerted a dramatic impact on the global economy and financial markets. This study is the first attempt to investigate the influence of these government policy responses on global stock market liquidity. To this end, we examine daily data from 49 countries for the period January-April 2020. We demonstrate that the impact of the interventions is limited in scale and scope. Workplace and school closures deteriorate liquidity in emerging markets, while information campaigns on the novel coronavirus facilitate trading activity.

Keywords: novel coronavirus, COVID-19, stock market liquidity, turnover ratio, non-pharmaceutical interventions, government policy responses, international financial markets

JEL Classification: G01, G12, G15, G18, H12, H51, I18, Q54

Suggested Citation

Zaremba, Adam and Aharon, ⸹ David Y. and Demir, Ender and Kizys, Renatas and Zawadka, Dariusz, COVID-19, Government Policy Responses, and Stock Market Liquidity around the World: A Note (Apirl 23, 2020). Available at SSRN: https://ssrn.com/abstract=3631177 or http://dx.doi.org/10.2139/ssrn.3631177

Adam Zaremba (Contact Author)

Montpellier Business School ( email )

2300 Avenue des Moulins
Montpellier, Occitanie 34000
France

Poznan University of Economics and Business ( email )

al. Niepodległości 10
Poznań, 61-875
Poland

HOME PAGE: http://adamzaremba.pl

⸹ David Y. Aharon

Ono Academic College ( email )

Kyriat Ono
Israel

Ender Demir

Istanbul Medeniyet University ( email )

D-100 Karayolu
Merdivenkoy Mevkii No:6/1 Goztepe/Kadıkoy
Istanbul
Turkey

Renatas Kizys

University of Southampton, Southampton Business School, Department of Banking and Finance ( email )

Room 1013, Building 4
Highfield Campus
Southampton, SO17 1BJ
United Kingdom
+442380598612 (Phone)

HOME PAGE: http://https://www.southampton.ac.uk/business-school/about/staff/rk1y18.page

Dariusz Zawadka

Poznan University of Economics - Department of Investment and Capital Markets ( email )

Poznan, 60-967
Poland

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