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Economic Contagion of COVID-19 Pandemic on International Stock Markets: A Study Based on Cointegration Approach with Selected Countries

Author

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  • Debabrata Mukhopadhyay

Abstract

The main objective of the present article is to understand the economic contagion of the COVID-19 pandemic that has been causing several economic disruptions with different impacts at different sectors and the global level through multiple channels including trade and financial markets. The purpose of this analysis is to examine the economic interdependence among the leading equity markets of the five big economies in the world namely, the USA, China, Japan, Germany, and India through the transmission of ‘market sentiments’ during the period 11 November 2019 to 10 July 2020, which includes the COVID period since 11 March 2020, based on cointegration approach and pairwise Granger causality. The results show the presence of cointegration among the five stock markets during the COVID-19 pandemic period, however, no such cointegration is present during the pre-COVID-19 period. There exist substantial differences in pairwise causality among these countries in the COVID-19 period compared to the pre-COVID-19 period. Domestic policies should be aimed at reducing financial fragility, that is, unnecessary debt commitments should be reduced. At the international level financial standards should be improved.

Suggested Citation

  • Debabrata Mukhopadhyay, 2025. "Economic Contagion of COVID-19 Pandemic on International Stock Markets: A Study Based on Cointegration Approach with Selected Countries," Vision, , vol. 29(5), pages 550-557, November.
    • Handle: RePEc:sae:vision:v:29:y:2025:i:5:p:550-557
    DOI: 10.1177/09722629221087375
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    References listed on IDEAS

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