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Does Stock Market Respond to Disease Pandemic? A Case of COVID-19 in Nigeria


  • Kumeka Terver Theophilus
  • Falayi Olabusuyi Rufus
  • Adedokun Adeniyi Jimmy

    (Department of Economics, Dominican University, Ibadan)


This paper investigates whether stock markets respond to disease pandemic referencing the case of COVID-19 in Nigeria. The paper employs three cointegrating regression models: Fully Modified Ordinary Least Squares, Dynamic Ordinary Least Squares, and Canonical Cointegrating Regression to analyse the effect of growth in total COVID-19 confirmed cases and related deaths in Nigeria and across the globe from 27 February 2020 to 4 September 2020 on the stock market performance. Key findings support the presence of long-run association between stock market returns and COVID-19 in Nigeria. The stock market is found to respond negatively to both domestic and global growths in total confirmed cases and deaths of COVID-19. Consequently, affected businesses in Nigeria should be assisted and bailed out by the government through practices such as tax filing, subsidies, targeted spending, and credit.

Suggested Citation

  • Kumeka Terver Theophilus & Falayi Olabusuyi Rufus & Adedokun Adeniyi Jimmy, 2021. "Does Stock Market Respond to Disease Pandemic? A Case of COVID-19 in Nigeria," Acta Universitatis Sapientiae, Economics and Business, Sciendo, vol. 9(1), pages 86-101, September.
  • Handle: RePEc:vrs:auseab:v:9:y:2021:i:1:p:86-101:n:3
    DOI: 10.2478/auseb-2021-0005

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    More about this item


    COVID-19; pandemic; stock market returns; cointegrating regressions;
    All these keywords.

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • G2 - Financial Economics - - Financial Institutions and Services


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