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Covid-19 vaccines and investment performance: Evidence from equity funds in European Union

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  • Mirza, Nawazish
  • Umar, Muhammad
  • Mangafic, Jasmina

Abstract

In this paper, we analyze the impact of the marketing authorization of EMA-approved vaccines on the returns of equity funds in the EU. Using the event study methodology, we report that the introduction of all vaccines had a positive impact on the funds' returns. Higher abnormal returns were associated with the earlier vaccines, indicating the first-mover advantage and the abnormal returns were persistent across several event windows. The findings imply that equity markets welcomed the vaccine administration as an important pharmaceutical intervention to support the quasi-revival of business activities. Consequently, there was a significant uplift in the economic bottom line.

Suggested Citation

  • Mirza, Nawazish & Umar, Muhammad & Mangafic, Jasmina, 2023. "Covid-19 vaccines and investment performance: Evidence from equity funds in European Union," Finance Research Letters, Elsevier, vol. 53(C).
    • Handle: RePEc:eee:finlet:v:53:y:2023:i:c:s1544612323000247
    DOI: 10.1016/j.frl.2023.103650
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    21. Samra Chaudary & Nawazish Mirza, 2017. "Domestic and cross-border returns to bidders in acquisitions into the E.U," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 30(1), pages 1021-1032, January.
    22. Berninger, M. & Fiesenig, B. & Schiereck, D., 2021. "The performance of corporate bond issuers in times of financial crisis: empirical evidence from Latin America," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 127036, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    23. Linda H. Chen & George J. Jiang & Kevin X. Zhu, 2022. "Information uncertainty of fiscal year end quarter earnings," Review of Accounting and Finance, Emerald Group Publishing Limited, vol. 21(2), pages 83-108, April.
    24. Ji, Xiangfeng & Chen, Xueqi & Mirza, Nawazish & Umar, Muhammad, 2021. "Sustainable energy goals and investment premium: Evidence from renewable and conventional equity mutual funds in the Euro zone," Resources Policy, Elsevier, vol. 74(C).
    25. Viet Hoang Le & Hans-Jörg von Mettenheim & Stéphane Goutte & Fei Liu, 2022. "News-based sentiment: can it explain market performance before and after the Russia–Ukraine conflict?," Journal of Risk Finance, Emerald Group Publishing Limited, vol. 24(1), pages 72-88, November.
    26. Jundong (Jeff) Wang, 2020. "Does analyst forecast dispersion represent investors’ perceived uncertainty toward earnings?," Review of Accounting and Finance, Emerald Group Publishing Limited, vol. 19(3), pages 289-312, April.
    27. Nawazish Mirza & Mawal Sara Saeed & Kumail Abbas Rizvi, 2013. "The Pricing of Size, Book to Market and Financial Leverage in Euro Stocks," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 26(2), pages 177-190, January.
    28. Jundong (Jeff) Wang, 2020. "Does analyst forecast dispersion represent investors’ perceived uncertainty toward earnings?," Review of Accounting and Finance, Emerald Group Publishing Limited, vol. 19(3), pages 289-312, April.
    29. Jamila Abaidi Hasnaoui & Syed Kumail Abbas Rizvi & Krishna Reddy & Nawazish Mirza & Bushra Naqvi, 2021. "Human capital efficiency, performance, market, and volatility timing of asian equity funds during COVID-19 outbreak," Journal of Asset Management, Palgrave Macmillan, vol. 22(5), pages 360-375, September.
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    Cited by:

    1. Wang, Haiyan & Mirza, Nawazish & Umar, Muhammad & Xie, Xin, 2023. "Climate change and blue returns: Evidence from Niche firms in China," Finance Research Letters, Elsevier, vol. 56(C).
    2. Chen, Zhuo & Mirza, Nawazish & Umar, Muhammad & Sawtari, Zeina & Xie, Xin, 2024. "Mineral resource investments and mutual funds performance: A remedy for recovery in BRICS," Resources Policy, Elsevier, vol. 91(C).
    3. Kayani, Umar & Hasnaoui, Amir & Khan, Maaz & Zahoor, Nadia & Nawaz, Farrukh, 2024. "Analyzing fossil fuel commodities' return spillovers during the Russia and Ukraine crisis in the energy market," Energy Economics, Elsevier, vol. 135(C).
    4. Xie, Xin & Mirza, Nawazish & Umar, Muhammad & Ji, Xiaoman, 2024. "Covid-19 and market discipline: Evidence from the banking sector in emerging markets," International Review of Economics & Finance, Elsevier, vol. 89(PB), pages 612-621.
    5. Rahat, Birjees & Nguyen, Pascal, 2024. "The impact of ESG profile on Firm's valuation in emerging markets," International Review of Financial Analysis, Elsevier, vol. 95(PA).
    6. Li, Shi & Li, Meng & Fu, Rongsha, 2024. "A sustainable pandemic response: The impact of COVID-19 vaccination coverage on economic policy uncertainty," International Review of Economics & Finance, Elsevier, vol. 92(C), pages 316-332.

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    More about this item

    Keywords

    Public health; Equity returns; Mutual funds; Covid-19 vaccines;
    All these keywords.

    JEL classification:

    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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