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Chinese Stock Market’s Reaction to COVID‐19 in the Short and Long Run

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  • Hongxia Wang
  • Zongzheng Yu

Abstract

We study the impact of COVID‐19 on Chinese stock market which can be seen as a complex system. We use the event study method to evaluate its performance change in terms of the return rate, turnover rate, etc. We show that the abnormal return of stock market was significantly negative after the outbreak of COVID‐19 and did not turn positive until May 2020. Moreover, the five‐factor model is used to estimate the ordinary returns of different industries and show that abnormal returns for medical and food industries were significantly positive, while energy and public utility industries had significantly negative abnormal returns which persisted for a long time. COVID‐19 had lag effects on clothes industry, finance industry, transportation industry, and IT industry. We also find that energy and finance industries had negative abnormal turnover rates during the sample period, while other industries, such as healthcare and telecommunications service industries, had positive abnormal turnover rates.

Suggested Citation

  • Hongxia Wang & Zongzheng Yu, 2022. "Chinese Stock Market’s Reaction to COVID‐19 in the Short and Long Run," Complexity, John Wiley & Sons, vol. 2022(1).
    • Handle: RePEc:wly:complx:v:2022:y:2022:i:1:n:6917527
    DOI: 10.1155/2022/6917527
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    References listed on IDEAS

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    Cited by:

    1. Caini Yang & Jianling Wang & Lemuel Kenneth David, 2024. "The same or different? How optimal distinctiveness in corporate social responsibility affects organizational resilience during COVID‐19," Business Ethics, the Environment & Responsibility, John Wiley & Sons, Ltd., vol. 33(4), pages 583-605, October.

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