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Feverish Stock Price Reactions to COVID-19


  • Wagner, Alexander F.
  • Ramelli, Stefano


The market reactions to the 2019 novel Coronavirus disease (COVID-19) provide new insights into how real shocks and financial policies drive firm value. Initially, internationally-oriented firms, especially those more exposed to trade with China, underperformed. As the virus spread to Europe and the US, corporate debt and cash holdings emerged as important value drivers, relevant even after the Fed intervened in the bond market. The content and tone of conference calls mirror this development over time. Overall, the results illustrate how the anticipated real effects from the health crisis, a rare disaster, were amplified through financial channels.

Suggested Citation

  • Wagner, Alexander F. & Ramelli, Stefano, 2020. "Feverish Stock Price Reactions to COVID-19," CEPR Discussion Papers 14511, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:14511

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    References listed on IDEAS

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    More about this item


    Corporate debt; Coronavirus; Covid-19; Event study; Global value chains; Leverage; Pandemic; Sars-cov-2; Supply chains; Tail risk;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G02 - Financial Economics - - General - - - Behavioral Finance: Underlying Principles
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • F15 - International Economics - - Trade - - - Economic Integration
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration

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