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The impact of the COVID-19 lockdown on stock market performance: evidence from Vietnam

Author

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  • Dao Le Trang Anh
  • Christopher Gan

Abstract

Purpose - This study explores the effects of the COVID-19 outbreak and its following lockdown on daily stock returns in Vietnam, a fast-growing emerging market that successfully revived after the pandemic lockdown. Design/methodology/approach - This study uses panel-data regression models to evaluate the influence of the daily increase in the number of COVID-19 confirmed cases during pre-lockdown and lockdown on daily stock returns of 723 listed firms in Vietnam from 30 January to 30 May 2020. Findings - The study confirms the adverse impact of the daily increasing number of COVID-19 cases on stock returns in Vietnam. The study also discloses that the Vietnam stock market before and during the nationwide lockdown performed in opposing ways. Though COVID-19 pre-lockdown had a significant, negative impact on Vietnam's stock returns, the lockdown period had a significant, positive influence on stock performance of the entire market and the different business sectors in Vietnam. The financial sector was hardest hit on the Vietnam stock market during the COVID-19 outbreak. Research limitations/implications - The study indicates investors' confidence and trust in the Vietnam government's decisions to combat COVID-19 and favorable stocks prices were the main reasons that the Vietnam stock market rebounded during and after lockdown. Originality/value - This is the first study to examine the impact of COVID-19 during the pre-lockdown and lockdown periods on stock performance in Vietnam, a rapidly developing economy that was successful in controlling the pandemic with a rejuvenated stock market after lockdown.

Suggested Citation

  • Dao Le Trang Anh & Christopher Gan, 2020. "The impact of the COVID-19 lockdown on stock market performance: evidence from Vietnam," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 48(4), pages 836-851, August.
    • Handle: RePEc:eme:jespps:jes-06-2020-0312
    DOI: 10.1108/JES-06-2020-0312
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    Citations

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    Cited by:

    1. Ha Che-Ngoc & Nga Do-Thi & Thao Nguyen-Trang, 2023. "Profitability of Ichimoku-Based Trading Rule in Vietnam Stock Market in the Context of the COVID-19 Outbreak," Computational Economics, Springer;Society for Computational Economics, vol. 62(4), pages 1781-1799, December.
    2. Yu, Xiaoling & Xiao, Kaitian, 2023. "COVID-19 Government restriction policy, COVID-19 vaccination and stock markets: Evidence from a global perspective," Finance Research Letters, Elsevier, vol. 53(C).
    3. Habibullah, Muzafar & Saari, Mohd Yusof & Haji Din, Badariah & Safuan, Sugiharso & Utit, Chakrin, 2021. "Labour Market Reactions to Lockdown Measures during the Covid-19 Pandemic in Malaysia: An Empirical Note," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 55(1), pages 39-49.
    4. 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 - AGER, vol. 0(4(637), W), pages 243-256, Winter.
    5. Xiuping Ji & Naipeng (Tom) Bu & Chen Zheng & Honggen Xiao & Caixia Liu & Xuesheng Chen & Kangping Wang, 2024. "Stock market reaction to the COVID-19 pandemic: an event study," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 23(1), pages 167-186, January.
    6. Sabeeh Ullah, 2023. "Impact of COVID-19 Pandemic on Financial Markets: a Global Perspective," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 14(2), pages 982-1003, June.
    7. Seyed Alireza Athari & Dervis Kirikkaleli & Tomiwa Sunday Adebayo, 2023. "World pandemic uncertainty and German stock market: evidence from Markov regime-switching and Fourier based approaches," Quality & Quantity: International Journal of Methodology, Springer, vol. 57(2), pages 1923-1936, April.

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