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Does Stock Market Respond to Disease Pandemic? A Case of COVID-19 in Nigeria

Does Stock Market Respond to Disease Pandemic? A Case of COVID-19 in Nigeria AbstractThis paper investigates whether stock markets respond to disease pandemic referencing the case of COVID-19 in Nigeria. The paper employs three cointegrating regression models: Fully Modified Ordinary Least Squares, Dynamic Ordinary Least Squares, and Canonical Cointegrating Regression to analyse the effect of growth in total COVID-19 confirmed cases and related deaths in Nigeria and across the globe from 27 February 2020 to 4 September 2020 on the stock market performance. Key findings support the presence of long-run association between stock market returns and COVID-19 in Nigeria. The stock market is found to respond negatively to both domestic and global growths in total confirmed cases and deaths of COVID-19. Consequently, affected businesses in Nigeria should be assisted and bailed out by the government through practices such as tax filing, subsidies, targeted spending, and credit. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Acta Universitatis Sapientiae, Economics and Business de Gruyter

Does Stock Market Respond to Disease Pandemic? A Case of COVID-19 in Nigeria

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References (40)

Publisher
de Gruyter
Copyright
© 2021 Terver Theophilus Kumeka et al., published by Sciendo
eISSN
2360-0047
DOI
10.2478/auseb-2021-0005
Publisher site
See Article on Publisher Site

Abstract

AbstractThis paper investigates whether stock markets respond to disease pandemic referencing the case of COVID-19 in Nigeria. The paper employs three cointegrating regression models: Fully Modified Ordinary Least Squares, Dynamic Ordinary Least Squares, and Canonical Cointegrating Regression to analyse the effect of growth in total COVID-19 confirmed cases and related deaths in Nigeria and across the globe from 27 February 2020 to 4 September 2020 on the stock market performance. Key findings support the presence of long-run association between stock market returns and COVID-19 in Nigeria. The stock market is found to respond negatively to both domestic and global growths in total confirmed cases and deaths of COVID-19. Consequently, affected businesses in Nigeria should be assisted and bailed out by the government through practices such as tax filing, subsidies, targeted spending, and credit.

Journal

Acta Universitatis Sapientiae, Economics and Businessde Gruyter

Published: Sep 1, 2021

Keywords: COVID-19; pandemic; stock market returns; cointegrating regressions; I1; G2

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