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Market Reactions to Government Support Packages During the Pandemic in North Macedonia

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  • Srbinoski Bojan

    (1 University St. Kliment Ohridski, Faculty of Tourism and Hospitality, Ohrid, North Macedonia)

  • Meceski Stevco

    (2 University St. Kliment Ohridski, Faculty of Tourism and Hospitality, Ohrid, North Macedonia)

  • Joldeska Irina

    (3 University St. Kliment Ohridski, Faculty of Tourism and Hospitality, Ohrid, North Macedonia)

Abstract

The Covid-19 crisis put pressure on governments to design immediate support packages for alleviating the negative economic consequences for households and businesses. In this paper, we examine the stock market’s reactions to the announcements of each of the four support packages designed by the Macedonian government during the pandemic year. We find that the magnitude, the target, and the extent of realisation of the support package mattered how investors reacted to the government interventions. The market positively reacted only around the second package which was mainly designed to support firms’ liquidity. Once the market consumed the information about the poor realisation of the devised packages, investors remained restrained and uncertain for the upcoming support package. Our findings have important policy implications by showing the differential response to the different types of support packages.

Suggested Citation

  • Srbinoski Bojan & Meceski Stevco & Joldeska Irina, 2022. "Market Reactions to Government Support Packages During the Pandemic in North Macedonia," Economic Themes, Sciendo, vol. 60(4), pages 429-440, December.
    • Handle: RePEc:vrs:ecothe:v:60:y:2022:i:4:p:429-440:n:1
    DOI: 10.2478/ethemes-2022-0023
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    References listed on IDEAS

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    1. Md. Mahmudul Alam & Haitian Wei & Abu N. M. Wahid, 2021. "COVID‐19 outbreak and sectoral performance of the Australian stock market: An event study analysis," Australian Economic Papers, Wiley Blackwell, vol. 60(3), pages 482-495, September.
    2. Ashraf, Badar Nadeem, 2020. "Economic impact of government interventions during the COVID-19 pandemic: International evidence from financial markets," Journal of Behavioral and Experimental Finance, Elsevier, vol. 27(C).
    3. Viral V Acharya & Sascha Steffen, 2020. "The Risk of Being a Fallen Angel and the Corporate Dash for Cash in the Midst of COVID," Review of Corporate Finance Studies, Oxford University Press, vol. 9(3), pages 430-471.
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    More about this item

    Keywords

    Stock market; Covid-19; event study; North Macedonia;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

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