Vaccine Initiation Rate and Volatility in the International Stock Market during COVID-19

Abstract

We examine the role of the vaccine initiation rate in mitigating the international stock market volatility during COVID-19. Our findings reflect that the positive effect of the vaccine initiation rate assists in stabilizing the international stock markets. This possible effect is stronger for developed markets, and countries with the vaccine initiation rate are above its overall average. The mass vaccinations signal a lower probability of stringent government responses to the pandemic. The low level of trust in governments’ actions makes the investors hold compliance fears and doubt that the negative effects of COVID-19 may be longer, especially for emerging markets.

Keywords: COVID-19, government interventions, stock market volatility, vaccine initiation rate

JEL Classification: G01, G10, G12, G15, G18, H12, H51, I18, Q54