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How the Coronavirus Crisis Affected Japanese Industries: Evidence from the Stock Market

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  • Willem THORBECKE

Abstract

The COVID-19 Crisis has buffeted the Japanese economy. To investigate how industries have been impacted this paper examines the response of sectoral stock returns. The machinery sector has suffered due to its exposure to the macroeconomy. Real estate and tourism have been harmed not by macroeconomic influences but by factors such as the voluntary lockdown and the travel restrictions. Sectors related to health, entertainment, and delivery services gained not because of the macroeconomic environment but because of idiosyncratic advantages. For those sectors such as machinery harmed by macroeconomic factors, the strongest impact has come from the Japanese economy itself rather than the world economy, exchange rates, or oil prices. These findings imply that nurturing the Japanese economy is key to helping Japanese firms recover.

Suggested Citation

  • Willem THORBECKE, 2020. "How the Coronavirus Crisis Affected Japanese Industries: Evidence from the Stock Market," Discussion papers 20061, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:20061
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    File URL: https://www.rieti.go.jp/jp/publications/dp/20e061.pdf
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    References listed on IDEAS

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    1. Thorbecke, Willem, 2019. "How oil prices affect East and Southeast Asian economies: Evidence from financial markets and implications for energy security," Energy Policy, Elsevier, vol. 128(C), pages 628-638.
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    8. Schwert, G William, 1990. "Stock Returns and Real Activity: A Century of Evidence," Journal of Finance, American Finance Association, vol. 45(4), pages 1237-1257, September.
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    Cited by:

    1. Willem Thorbecke, 2020. "The Impact of the COVID-19 Pandemic on the U.S. Economy: Evidence from the Stock Market," JRFM, MDPI, vol. 13(10), pages 1-30, October.
    2. Michihito Ando & Chishio Furukawa & Daigo Nakata & Kazuhiko Sumiya, 2020. "Fiscal Responses to the COVID-19 Crisis in Japan: The First Six Months," National Tax Journal, National Tax Association;National Tax Journal, vol. 73(3), pages 901-926, September.
    3. Koichiro Moriya & Akihiko Noda, 2023. "On the Time-Varying Structure of the Arbitrage Pricing Theory using the Japanese Sector Indices," Papers 2305.05998, arXiv.org, revised Mar 2024.

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