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The COVID-19 pandemic and stock market performance of transportation and travel services firms: a cross-country study

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  • Umar Farooq
  • Adeel Nasir
  • Bilal
  • Muhammad Farhan Bashir

Abstract

This paper examined the firm-specific abnormal returns of transportation and travel services sectors from the USA, UK, France, China, India, Mexico, Turkey, and Thailand in response to Coronavirus Disease 2019 (COVID-19) using event study methodology. Our results revealed that investors in developed countries provide significant long term abnormal returns for the first 101 days. Furthermore, no significant cumulative average abnormal returns (CAAR) were found in response to the COVID-19 outbreak, travel restrictions, lockdown, stimulus package, and historical decline in oil prices except in the case of the USA. It is concluded that with the gradual increase in new cases and deaths, abnormal returns are also adjusted, making the effects of these events insignificant at the time of their occurrence. Results also showed that firms in developing countries recognized significant negative abnormal returns in response to the second wave of COVID-19. These results are useful for investors in devising investment strategies relevant to contextual settings.

Suggested Citation

  • Umar Farooq & Adeel Nasir & Bilal & Muhammad Farhan Bashir, 2022. "The COVID-19 pandemic and stock market performance of transportation and travel services firms: a cross-country study," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 35(1), pages 6867-6883, December.
    • Handle: RePEc:taf:reroxx:v:35:y:2022:i:1:p:6867-6883
    DOI: 10.1080/1331677X.2022.2053784
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    Cited by:

    1. Yen-Chang Chen & Ying-Sing Liu, 2023. "Market Efficiency and Stock Investment Loss Aversion Guide During COVID-19 Pandemic Events: The Case for Applying Data Mining," SAGE Open, , vol. 13(4), pages 21582440231, December.
    2. Bilal & Adeel Nasir & Umar Farooq & Muhammad Farhan Bashir, 2024. "Stock returns, government response strategies, and daily new case bursts during COVID‐19: A cross‐country perspective," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 29(1), pages 465-485, January.
    3. Shahzad, Umer & Mohammed, Kamel Si & Tiwari, Sunil & Nakonieczny, Joanna & Nesterowicz, Renata, 2023. "Connectedness between geopolitical risk, financial instability indices and precious metals markets: Novel findings from Russia Ukraine conflict perspective," Resources Policy, Elsevier, vol. 80(C).

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