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The impact of supply chain disruptions on stock market returns during COVID-19

The impact of supply chain disruptions on stock market returns during COVID-19 How has COVID-19 impacted meat processors' stock returns? The authors evaluate the effects of supply chain disruptions (e.g. lockdowns and COVID-19 incidences among workers) on stock market prices of meat processors during the COVID-19 pandemic.Design/methodology/approachThis study uses an event study approach to examine the disruptions from COVID-19 through events such as plant shutdowns, the pandemic announcement, lockdown dates and the first case of COVID-19 outbreaks in meat processing plants. The dataset includes S&P 500, Google Trends, financial beta and data collected for 14 US publicly traded meat processing companies.FindingsResults show that nationwide events (e.g. announcement of the pandemic) had no statistically significant impact on average abnormal returns of meat processing companies. Individually, however, firms experienced negative abnormal returns. COVID-19-related events in individual meat processing companies had a temporary negative abnormal return in the days prior to the event.Originality/valueThis study has two main contributions. First, the authors estimate the effect of COVID-19 on the returns of meat processors. Second, the authors use Google Trends to estimate the expected stock markets returns of meat processing companies. This study provides insight to investors on the behavior of industry returns from events such as outbreaks that affect human health. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Agricultural Finance Review Emerald Publishing

The impact of supply chain disruptions on stock market returns during COVID-19

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Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
0002-1466
DOI
10.1108/afr-06-2021-0083
Publisher site
See Article on Publisher Site

Abstract

How has COVID-19 impacted meat processors' stock returns? The authors evaluate the effects of supply chain disruptions (e.g. lockdowns and COVID-19 incidences among workers) on stock market prices of meat processors during the COVID-19 pandemic.Design/methodology/approachThis study uses an event study approach to examine the disruptions from COVID-19 through events such as plant shutdowns, the pandemic announcement, lockdown dates and the first case of COVID-19 outbreaks in meat processing plants. The dataset includes S&P 500, Google Trends, financial beta and data collected for 14 US publicly traded meat processing companies.FindingsResults show that nationwide events (e.g. announcement of the pandemic) had no statistically significant impact on average abnormal returns of meat processing companies. Individually, however, firms experienced negative abnormal returns. COVID-19-related events in individual meat processing companies had a temporary negative abnormal return in the days prior to the event.Originality/valueThis study has two main contributions. First, the authors estimate the effect of COVID-19 on the returns of meat processors. Second, the authors use Google Trends to estimate the expected stock markets returns of meat processing companies. This study provides insight to investors on the behavior of industry returns from events such as outbreaks that affect human health.

Journal

Agricultural Finance ReviewEmerald Publishing

Published: Jul 7, 2022

Keywords: Event study; Meat processors; Abnormal returns; Q13; Q14

References