Self-restraint, subsidy, and stock market reactions to the coronavirus outbreak: Evidence from the Japanese restaurant industry

This study examined the stock market response of the Japanese restaurant industry to the announcement of the self-restraint request and subsidy for restaurants by the Japanese government during the coronavirus outbreak. Using the event study approach, it was found that the market reacted negatively to the self-restraint request and positively to the subsidy for restaurants. Following the announcement of the self-restraint request, investors in the restaurant industry responded positively to the government’s stringent policy responses. Conversely, following the announcement on the “dining-out” subsidy, investors reacted negatively to the stringent government policies. Our findings provide useful information for policy makers and practitioners to mitigate losses in the hospitality industry during the pandemic.