Trust and stock market volatility during the COVID-19 crisis

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Abstract

We investigate if trust affects global stock market volatility during the COVID-19 pandemic. Using a sample of 47 national stock markets, we find the stock markets’ volatility to be significantly lower in high-trust countries (in reaction to COVID-19 case announcements). Both trust in fellow citizens as well as in the countries’ governments are of significant importance.

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Financial markets under the global pandemic of COVID-19

Dayong Zhang, Min Hu, Qiang Ji (2020)

Highlights • The COVID-19 pandemic has significant impacts on global financial markets. • Substantial increases of volatility are found in global markets due to the outbreak. • Global stock markets linkages display clear different patterns before and after the pandemic announcement. • Policy responses may create further uncertainties in the global financial markets.

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

Abdullah M. Al-Awadhi, Khaled Al-Saifi, Ahmad Al-Awadhi … (2020)

This study investigates whether contagious infectious diseases affect stock market outcomes. As a natural experiment, we use panel data regression analysis to measure 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.