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IMPACTS OF GLOBAL AND LOCAL COVID-19 CASES ON EMERGING STOCK MARKETS

Year 2021, Volume: 8 Issue: 3, 1658 - 1669, 30.11.2021
https://doi.org/10.30798/makuiibf.912345

Abstract

In this study, we examine the both local and global Covid-19 deaths and confirmed cases impact on stock markets return. We use the daily data from 26 countries, which are classified as emerging financial markets. According to the findings, a decrease in emerging stock market returns is not only due to local confirmed cases, but also from global confirmed cases. Our analysis also suggests that while an increase in total confirmed cases within the local variables leads to more decrease, total deaths within the global variables cause more decline in returns. When we consider the change in the stock market returns brought about by both local and global level confirmed cases rates and death rates increase, all global level variables (new confirmed cases, total confirmed deaths, new confirmed cases) except total confirmed cases lead to more decline. In other words, even if the countries control the covid-19 locally, the negative global impact on the stock market will continue.

References

  • Al-Awadhi, A. M., Al-Saifi, K., Al-Awadhi, A., and Alhamadi, S. (2020). Death and contagious infectious diseases: Impact of the COVID-19 virus on stock market returns, Journal of Behavioral and Experimental Finance,27, 100326. https://doi.org/10.1016/j.jbef.2020.100326
  • Alexakis, C., Eleftheriou, K., and Patsoulis, P. (2021). COVID-19 containment measures and stock market returns: An international spatial econometrics investigation, Journal of Behavioral and Experimental Finance, 29, 100428. https://doi.org/10.1016/j.jbef.2020.100428
  • Ali, M., Alam, N., and Rizvi, S. A. R. (2020). Coronavirus (COVID-19)–An epidemic or pandemic for financial markets, Journal of Behavioral and Experimental Finance, 27, 100341. https://doi.org/10.1016/j.jbef.2020.100341
  • Ashraf, B. N. (2020). Stock markets’ reaction to COVID-19: cases or fatalities? . Research in International Business and Finance, 54, 101249. https://doi.org/10.1016/j.ribaf.2020.101249
  • Baig, A.S., Butt, H.A., Haroon, O. and Rizvi, S.A.R. (2021). Deaths, panic, lockdowns and US equity markets: The case of COVID-19 pandemic, Finance Research Letters, 38, 101701. https://doi.org/10.1016/j.frl.2020.101701
  • Breusch, T. S., and Pagan, A. R. (1980). The Lagrange multiplier test and its applications to model specification in econometrics, The Review of Economic Studies, 47(1), 239-253.
  • Choi, I. (2001). Unit root tests for panel data, Journal of international money and Finance, 20(2), 249-272.
  • Goodell, J. W. (2020). Covid-19 and finance: Agendas for future research, Finance Research Letters, 35, 101512. https://doi.org/10.1016/j.frl.2020.101512
  • Haroon, O., and Rizvi, S. A. R. (2020). Flatten the curve and stock market liquidity–an inquiry into emerging economies. Emerging Markets Finance and Trade, 56(10), 2151-2161. https://doi.org/10.1080/1540496X.2020.1784716
  • Investing, 2020. Investing Data. Investing.com, Nocosia, Cyprus.
  • Maddala, G. S., and Wu, S. (1999). A comparative study of unit root tests with panel data and a new simple test. Oxford Bulletin of Economics and statistics, 61(S1), 631-652.
  • Pesaran, H. M. (2004). General diagnostic tests for cross-sectional dependence in panels, University of Cambridge, Cambridge Working Papers in Economics, 435.
  • Phan, D.H.B. and Narayan, P.K. (2020). Country responses and the reaction of the stock market to COVID-19-a preliminary exposition, Emerging Market Finance and Trade, https://doi.org/10.1080/1540496X.2020.1784719
  • Salisu, A. A., Sikiru, A. A., and Vo, X. V. (2020). Pandemics and the emerging stock markets, Borsa Istanbul Review, 20(1), 40-48. https://doi.org/10.1016/j.bir.2020.11.004
  • Topcu, M., and Gulal, O. S. 2020. The impact of COVID-19 on emerging stock markets, Finance Research Letters, 36, 101691. https://doi.org/10.1016/j.frl.2020.101691
  • World Health Organization (2020). Coronavirus disease 2019 (COVID-19): situation report, 94, retrieved from: https://www.who.int/emergencies/diseases/novel-coronavirus-2019/situation-reports
  • Zhang, D., Hu, M., and Ji, Q. (2020). Financial markets under the global pandemic of COVID-19. Finance Research Letters, 36, 101528. https://doi.org/10.1016/j.frl.2020.101528

KÜRESEL VE YEREL COVİD-19 VAKALARININ GELİŞMEKTE OLAN BORSALAR ÜZERİNE ETKİSİ

Year 2021, Volume: 8 Issue: 3, 1658 - 1669, 30.11.2021
https://doi.org/10.30798/makuiibf.912345

Abstract

Bu çalışma doğrulanmış küresel ve yerel Covid-19 vaka sayılarının gelişmekte olan borsa getirileri üzerine etkisini incelemektedir. Çalışmada gelişmekte olan piyasa sınıflandırmasına giren 26 ülkeye ait günlük veriler kullanılmıştır. Elde edilen bulgular ışığında borsa getirilerinde yaşanan düşüşler sadece yerel Covid-19 vakaları ile açıklanmamakta aynı zamanda küresel Covid-19 vakaları da bu düşüşte etkili olmaktadır.Analiz sonuçları ayrıca, yerel değişkenler içinde doğrulanmış toplam vaka sayısında yaşanan artışın getiriler üzerinde en fazla azalmaya yol açtığını gösterirken, küresel değişkenlerde doğrulanmış toplam ölüm sayısının daha etkili olduğunu göstermektedir. Hem yerel hem de küresel düzeyde doğrulanmış toplam vaka oranları ve ölüm oranları göz önüne alındığında, doğrulanmış toplam vaka değişkeni dışındaki küresel boyuttaki diğer tüm değişkenlerde (yeni vaka, toplam ölüm, yeni ölüm) yaşanan artış borsa getirileri üzerinde daha fazla negatif etkiye yol açmaktadır. Diğer bir ifadeyle ülkeler Covid-19 salgınını yerel boyutta kontrol altına alsalar bile, küresel olarak yaşanan artışlar borsa getirileri üzerinde olumsuz etkilere yol açmaktadır.

References

  • Al-Awadhi, A. M., Al-Saifi, K., Al-Awadhi, A., and Alhamadi, S. (2020). Death and contagious infectious diseases: Impact of the COVID-19 virus on stock market returns, Journal of Behavioral and Experimental Finance,27, 100326. https://doi.org/10.1016/j.jbef.2020.100326
  • Alexakis, C., Eleftheriou, K., and Patsoulis, P. (2021). COVID-19 containment measures and stock market returns: An international spatial econometrics investigation, Journal of Behavioral and Experimental Finance, 29, 100428. https://doi.org/10.1016/j.jbef.2020.100428
  • Ali, M., Alam, N., and Rizvi, S. A. R. (2020). Coronavirus (COVID-19)–An epidemic or pandemic for financial markets, Journal of Behavioral and Experimental Finance, 27, 100341. https://doi.org/10.1016/j.jbef.2020.100341
  • Ashraf, B. N. (2020). Stock markets’ reaction to COVID-19: cases or fatalities? . Research in International Business and Finance, 54, 101249. https://doi.org/10.1016/j.ribaf.2020.101249
  • Baig, A.S., Butt, H.A., Haroon, O. and Rizvi, S.A.R. (2021). Deaths, panic, lockdowns and US equity markets: The case of COVID-19 pandemic, Finance Research Letters, 38, 101701. https://doi.org/10.1016/j.frl.2020.101701
  • Breusch, T. S., and Pagan, A. R. (1980). The Lagrange multiplier test and its applications to model specification in econometrics, The Review of Economic Studies, 47(1), 239-253.
  • Choi, I. (2001). Unit root tests for panel data, Journal of international money and Finance, 20(2), 249-272.
  • Goodell, J. W. (2020). Covid-19 and finance: Agendas for future research, Finance Research Letters, 35, 101512. https://doi.org/10.1016/j.frl.2020.101512
  • Haroon, O., and Rizvi, S. A. R. (2020). Flatten the curve and stock market liquidity–an inquiry into emerging economies. Emerging Markets Finance and Trade, 56(10), 2151-2161. https://doi.org/10.1080/1540496X.2020.1784716
  • Investing, 2020. Investing Data. Investing.com, Nocosia, Cyprus.
  • Maddala, G. S., and Wu, S. (1999). A comparative study of unit root tests with panel data and a new simple test. Oxford Bulletin of Economics and statistics, 61(S1), 631-652.
  • Pesaran, H. M. (2004). General diagnostic tests for cross-sectional dependence in panels, University of Cambridge, Cambridge Working Papers in Economics, 435.
  • Phan, D.H.B. and Narayan, P.K. (2020). Country responses and the reaction of the stock market to COVID-19-a preliminary exposition, Emerging Market Finance and Trade, https://doi.org/10.1080/1540496X.2020.1784719
  • Salisu, A. A., Sikiru, A. A., and Vo, X. V. (2020). Pandemics and the emerging stock markets, Borsa Istanbul Review, 20(1), 40-48. https://doi.org/10.1016/j.bir.2020.11.004
  • Topcu, M., and Gulal, O. S. 2020. The impact of COVID-19 on emerging stock markets, Finance Research Letters, 36, 101691. https://doi.org/10.1016/j.frl.2020.101691
  • World Health Organization (2020). Coronavirus disease 2019 (COVID-19): situation report, 94, retrieved from: https://www.who.int/emergencies/diseases/novel-coronavirus-2019/situation-reports
  • Zhang, D., Hu, M., and Ji, Q. (2020). Financial markets under the global pandemic of COVID-19. Finance Research Letters, 36, 101528. https://doi.org/10.1016/j.frl.2020.101528
There are 17 citations in total.

Details

Primary Language English
Journal Section Research Articles
Authors

Mustafa Emir Yücel 0000-0002-3189-7338

Özlem Fikirli 0000-0002-4003-7276

Hasan Şahin 0000-0001-5922-068X

Publication Date November 30, 2021
Submission Date April 10, 2021
Published in Issue Year 2021 Volume: 8 Issue: 3

Cite

APA Yücel, M. E., Fikirli, Ö., & Şahin, H. (2021). IMPACTS OF GLOBAL AND LOCAL COVID-19 CASES ON EMERGING STOCK MARKETS. Journal of Mehmet Akif Ersoy University Economics and Administrative Sciences Faculty, 8(3), 1658-1669. https://doi.org/10.30798/makuiibf.912345