Many Hands Make Light Work:Evidence from China&Apos;S Anti-Epidemic Bonds

15 Pages Posted: 25 Oct 2021 Last revised: 26 Apr 2022

See all articles by Ning Shi

Ning Shi

Shandong University of Finance and Economics

Ying Wang

Shandong University of Finance and Economics

Wenzhe Chen

Shandong University of Finance and Economics

Abstract

Based on China's anti-epidemic bond data, this paper investigates stock market reactions to the anti-epidemic bond issuance announcements during the COVID-19 pandemic. We find that anti-epidemic bond issuance significantly increases the cumulative abnormal return (CAR) compared with conventional bond issuance. Issuing anti-epidemic bonds can enhance firms' risk-resistance capacity and corporate social responsibility (CSR) performance during the pandemic period; thus, anti-epidemic bonds are favored by shareholders. Further analysis reveals that positive announcement stock returns for anti-epidemic bonds emerge only when the epidemic situation worsens, suggesting that market investors expect anti-epidemic bond issuers to perform better during the outbreak

Keywords: Anti-epidemic bonds, Stock market reaction, Covid-19, Cumulative abnormal return

Suggested Citation

Shi, Ning and Wang, Ying and Chen, Wenzhe, Many Hands Make Light Work:Evidence from China&Apos;S Anti-Epidemic Bonds. Available at SSRN: https://ssrn.com/abstract=3949256

Ning Shi

Shandong University of Finance and Economics ( email )

Erhuan East Road 7366
Jinan, 250014
China

Ying Wang

Shandong University of Finance and Economics

Wenzhe Chen (Contact Author)

Shandong University of Finance and Economics ( email )

Erhuan East Road 7366
Jinan, 250014
China

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