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Build resilience to overcome panic? Examining the global capital market during the COVID-19 pandemic

Author

Listed:
  • Liu, Ming
  • Tao, Qizhi
  • Wang, Xiangjin
  • Zhou, Hongyong

Abstract

Using stock indexes from 56 countries/regions and sovereign bond indexes from 57 countries during 2019/12/31 to 2021/12/31, we investigate the global market reactions to the COVID-19 pandemic after considering the resilience of supply chain and logistics. Both stock and bond markets have dropped significantly during the pandemic period; however, such a pandemic-induced drop in stock and bond markets becomes weaker for countries/regions with resilient supply chain and better logistics performance. Such effects are stronger when there is no COVID-19 vaccine and government policy responses to COVID-19 spread becomes stringent. A long-short portfolio of the stock and bond indexes from the countries/regions with the best and worst supply chain and logistics can generate significant abnormal returns.

Suggested Citation

  • Liu, Ming & Tao, Qizhi & Wang, Xiangjin & Zhou, Hongyong, 2023. "Build resilience to overcome panic? Examining the global capital market during the COVID-19 pandemic," International Review of Economics & Finance, Elsevier, vol. 88(C), pages 670-682.
    • Handle: RePEc:eee:reveco:v:88:y:2023:i:c:p:670-682
    DOI: 10.1016/j.iref.2023.07.015
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    References listed on IDEAS

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    1. Hassan, Tarek & Hollander, Stephan & van Lent, Laurence & Schwedeler, Markus & Tahoun, Ahmed, 2020. "Firm-Level Exposure to Epidemic Diseases: Covid-19, SARS, and H1N1," CEPR Discussion Papers 14573, C.E.P.R. Discussion Papers.
    2. Ding, Wenzhi & Levine, Ross & Lin, Chen & Xie, Wensi, 2021. "Corporate immunity to the COVID-19 pandemic," Journal of Financial Economics, Elsevier, vol. 141(2), pages 802-830.
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    Cited by:

    1. Lin, Yuya & Li, Shoubo, 2025. "Supply chain resilience, ESG performance, and corporate growth," International Review of Economics & Finance, Elsevier, vol. 97(C).

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    More about this item

    Keywords

    Supply chain resilience; Logistics performance; Covid-19; Stock index; Sovereign bond index; Long-short portfolio;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • F30 - International Economics - - International Finance - - - General
    • I10 - Health, Education, and Welfare - - Health - - - General

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