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The Asian Stock Market’s reaction to Covid outbreak: an empirical Insights from ARDL approach

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  • Dr. Neha SETH

    (Symbiosis International (Deemed) University, Noida, Uttar Pradesh, India)

  • Deepti SINGH

    (Central University of Rajasthan, Ajmer, Rajasthan, India)

Abstract

This paper examines the impact of COVID-19 on select Asian countries and the cointegration between the countries with high covid recovery rates and the countries with the least recovery rate. For this purpose, the daily closing values of ten Asian countries were taken from July 2018 to June 30, 2022. For this purpose, the paper employed Unit-root, Correlation analysis, Autoregressive Distributed Lag bound test, and Granger's Causality. The result implies that as an effect of Covid-19, all the markets were found to be strongly and positively correlated with each other. The results of the ARDL bound test depict that cointegration between the markets has significantly increased. Further, the pandemic has accelerated the bidirectional causality between the indices; hence, the markets affect each other even in the short run. The study results will help investors diversify their securities and hedge against adverse shocks like this pandemic.

Suggested Citation

  • Dr. Neha SETH & Deepti SINGH, 2023. "The Asian Stock Market’s reaction to Covid outbreak: an empirical Insights from ARDL approach," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(4(637), W), pages 243-256, Winter.
    • Handle: RePEc:agr:journl:v:4(637):y:2023:i:4(637):p:243-256
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    References listed on IDEAS

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