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Trust and stock market volatility during the COVID-19 crisis

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Listed:
  • Engelhardt, Nils
  • Krause, Miguel
  • Neukirchen, Daniel
  • Posch, Peter N.

Abstract

We investigate if trust affects global stock market volatility during the COVID-19 pandemic. Using a sample of 47 national stock markets, we find the stock markets’ volatility to be significantly lower in high-trust countries (in reaction to COVID-19 case announcements). Both trust in fellow citizens as well as in the countries’ governments are of significant importance.

Suggested Citation

  • Engelhardt, Nils & Krause, Miguel & Neukirchen, Daniel & Posch, Peter N., 2021. "Trust and stock market volatility during the COVID-19 crisis," Finance Research Letters, Elsevier, vol. 38(C).
    • Handle: RePEc:eee:finlet:v:38:y:2021:i:c:s1544612320316871
    DOI: 10.1016/j.frl.2020.101873
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    References listed on IDEAS

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    More about this item

    Keywords

    COVID-19; Trust; Financial markets; Volatility;
    All these keywords.

    JEL classification:

    • A14 - General Economics and Teaching - - General Economics - - - Sociology of Economics
    • G01 - Financial Economics - - General - - - Financial Crises
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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