COVID-19 Vaccines: Saving Lives and the Global Stock Markets
30 Pages Posted: 16 Feb 2021 Last revised: 12 Mar 2021
Date Written: February 14, 2021
Global stock markets react positively when different phases of human clinical trials on COVID-19 vaccine candidates begin. The average increase in stock market returns on day one of the trials is 15.2 basis points, and this estimate is both economically and statistically significant. The market reactions also show cross-phase and cross-country variations. We use a simple capital budgeting framework to explain the finding that stock markets convey important information about market-wide expectations on vaccine development that evolve along with the pandemic.
Keywords: COVID-19, pandemics, stock markets, vaccines
JEL Classification: G10, G14, I15
Suggested Citation: Suggested Citation