COVID-19 lockdowns, stimulus packages, travel bans, and stock returns

Paresh Kumar Narayan; Dinh Hoang Bach Phan; Guangqiang Liu

doi:10.1016/j.frl.2020.101732

COVID-19 lockdowns, stimulus packages, travel bans, and stock returns

Financ Res Lett. 2021 Jan:38:101732. doi: 10.1016/j.frl.2020.101732. Epub 2020 Aug 20.

Authors

Paresh Kumar Narayan¹, Dinh Hoang Bach Phan², Guangqiang Liu³

Affiliations

¹ Deakin University, Melbourne, Australia.
² La Trobe University, Melbourne, Australia.
³ Zhongnan University of Economics and Law, Wuhan, China.

Abstract

This paper examines the effect of government responses of G7 countries to the coronavirus pandemic (COVID-19) on stock market returns. Using time-series data, we show that lockdowns, travel bans, and economic stimulus packages all had a positive effect on the G7 stock markets. However, lockdowns were most effective in cushioning the effects of COVID-19. Our results are robust to different measures of returns and controls for other factors of returns.

Keywords: COVID-19; G7; Stock markets.