The Effect of COVID – 19 Pandemic on Global Stock Market Volatility: Can Economic Strength Help to Manage the Uncertainty?

Moshfique Uddin; Anup Chowdhury; Keith Philip Anderson; Kausik Chaudhuri

doi:10.1016/j.jbusres.2021.01.061

The Effect of COVID – 19 Pandemic on Global Stock Market Volatility: Can Economic Strength Help to Manage the Uncertainty?

Moshfique Uddin, Anup Chowdhury, Keith Philip Anderson, Kausik Chaudhuri

The York Management School

Research output: Contribution to journal › Article › peer-review

Abstract

Stock markets across the world have exhibited varying degrees of stock market volatility following the recent COVID-19 pandemic. We have examined the effect of this pandemic on stock market volatility and whether economic strength, measured by a set of selected country-level economic characteristics and factors such as economic resilience, intensity of capitalism, level of corporate governance, financial development, monetary policy rate and quality of health system, can potentially mitigate the possible detrimental effect of the global pandemic on stock market volatility. Using data from 34 developed and emerging markets, we have found that these country-level economic characteristics and factors do help to reduce the volatility arising from the virus pandemic. The results of this paper are important as policymakers can use these economic factors to set policy responses to tackle extraordinary heat in the global stock market in order to avoid any possible future financial crisis.

Original language	English
Pages (from-to)	31-44
Number of pages	14
Journal	JOURNAL OF BUSINESS RESEARCH
Volume	128
Early online date	11 Feb 2021
DOIs	https://doi.org/10.1016/j.jbusres.2021.01.061
Publication status	E-pub ahead of print - 11 Feb 2021

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10.1016/j.jbusres.2021.01.061

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Cite this

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title = "The Effect of COVID – 19 Pandemic on Global Stock Market Volatility: Can Economic Strength Help to Manage the Uncertainty?",

abstract = "Stock markets across the world have exhibited varying degrees of stock market volatility following the recent COVID-19 pandemic. We have examined the effect of this pandemic on stock market volatility and whether economic strength, measured by a set of selected country-level economic characteristics and factors such as economic resilience, intensity of capitalism, level of corporate governance, financial development, monetary policy rate and quality of health system, can potentially mitigate the possible detrimental effect of the global pandemic on stock market volatility. Using data from 34 developed and emerging markets, we have found that these country-level economic characteristics and factors do help to reduce the volatility arising from the virus pandemic. The results of this paper are important as policymakers can use these economic factors to set policy responses to tackle extraordinary heat in the global stock market in order to avoid any possible future financial crisis. ",

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