Death and contagious infectious diseases: Impact of the COVID-19 virus on stock market returns

Abdullah M Al-Awadhi; Khaled Alsaifi; Ahmad Al-Awadhi; Salah Alhammadi

doi:10.1016/j.jbef.2020.100326

Death and contagious infectious diseases: Impact of the COVID-19 virus on stock market returns

J Behav Exp Finance. 2020 Sep:27:100326. doi: 10.1016/j.jbef.2020.100326. Epub 2020 Apr 8.

Authors

Abdullah M Al-Awadhi¹, Khaled Alsaifi¹, Ahmad Al-Awadhi², Salah Alhammadi³

Affiliations

¹ College of Business Studies, Public Authority for Applied Education and Training (PAAET), Kuwait.
² Kuwait Consultancy Group, Kuwait.
³ College of Business Administration, Gulf University of Since and Technology, Kuwait.

Abstract

This study investigates whether contagious infectious diseases affect stock market outcomes. As a natural experiment, we use panel data analysis to test the effect of the COVID-19 virus, which is a contagious infectious disease, on the Chinese stock market. The findings indicate that both the daily growth in total confirmed cases and in total cases of death caused by COVID-19 have significant negative effects on stock returns across all companies.

Keywords: COVID-19; Stock returns.