COVID-19 vaccines and global stock markets

COVID-19 vaccination and household savings: An economic recovery channel

The COVID-19 pandemic increased people's propensity for precautionary savings in response to economic recession (e.g., Mody et al., 2012; Gropp and McShane, 2021; Levine et al., 2021). However, as the relevant vaccine roll-out continues, it mitigates people's concerns and boosts the macroeconomy, which leads to significant declines in household precautionary saving motives. Consistent with this expectation, using U.S. county-level vaccination, deposit, economic, and demographic data, we show that there is a significant negative relationship between COVID-19 vaccination and household savings. We attribute this negative relationship to an economic recovery channel because our findings also suggest that the vaccination has a strong negative impact on the unemployment rate and results in increases in consumer spending. Overall, our study adds to an emerging strand of literature on how COVID-19 vaccination affects households' financial behaviors.

How reactive is investment in US green bonds and ESG-eligible stocks in times of crisis? Exploring the COVID-19 crisis

This study examines how green bonds and environmental, social and governance (ESG) stock market returns have reacted to the COVID-19 crisis in the US. Unlike the Standard and Poor's (S&P) 500 index, the response of green bonds and ESG markets to pandemic progress is nonlinear: A low (large) level of confirmed new cases of COVID-19 has a positive (negative) impact. Furthermore, the implemented containment policies (stringency measures and vaccination campaigns) are positively valued, but their simultaneous use is perceived by investors as a bad signal. Overall, our findings question the resilience of investments in green bonds and ESG markets.

Does US full vaccination against COVID-19 immunize correspondingly S&P500 index: Evidence from the NARDL approach

This study analyzes the impact of COVID-19 full vaccination shocks on the US stock market in the period January 14, 2021- August 20, 2021. Using the Nonlinear Autoregressive Distributed Lag model, we find that the positive and negative COVID-19 full vaccination growth shocks have a positive and symmetrical impact on the US stock market over the long run. Additionally, the short-run findings provide that the US stock market reacts negatively with delay to the positive and negative COVID-19 full vaccination growth shocks. The study findings provide good insights that COVID-19 full vaccination immunizes accordingly to the S&P 500 index in the long run. The study results indicate that the impact of positive and negative COVID-19 full vaccination growth shocks on the stock market in the short run differs from that in the long run. This research bears important implications: governments should implement preventive measures with vaccination to recover the stock market. Policy makers ought to urge adopting policy measures to reduce panic and boost investor confidence during economic and health crises.

Comparative evidence on the impact of the COVID-19 outbreak and vaccine discovery on the global transportation industry

This research investigated the daily abnormal stock returns of 727 listed companies from 63 countries. We tested the impact of two major COVID-19 related events-(1) the declaration by the World Health Organisation of the global pandemic and (2) the vaccine discovery announcement by Pfizer/BioNTech-on transportation stock price reactions. We found that the pandemic declaration event negatively affected transportation stocks, whereas the vaccine announcement had a positive effect. Passenger markets were more affected than freight markets. Airlines stocks were most struck during the pandemic, whereas railroad companies were unaffected. However, airlines were the best performers following the vaccine discovery event. During the pandemic incident, European transportation firms were hit to a large extent; however, they also rebounded well during the vaccine event. Transportation firms in emerging markets were hit more than those in developed markets; however, both recovered to the same degree during the vaccine event. Transportation firms from countries with higher exposure to China were affected less than those with lower exposure during both events. Our implications are relevant to how investors make investment decisions surrounding market uncertainty. Moreover, corporate managers can refer to the findings when they formulate their firm's financial policies and operations to respond to stock market reactions in the wake of the pandemic. Our results can also help policymakers evaluate and deploy effective policies to boost investor confidence and keep transportation firms viable during a crisis. Overall, the findings can be used for future policy formulation in the transportation industry.

Airline stock markets reaction to the COVID-19 outbreak and vaccines: An event study

This paper examines the short-term market reaction of the airline industry to the declaration of COVID-19 as a global pandemic and to the announcements of the effectiveness of COVID-19 vaccines in the US. Using an event study, we observe a negative and statistically significant stock price reaction to the announcement of COVID-19 as a global pandemic. In contrast, we find a positive impact on the stock market due to the announcements of the effectiveness of COVID-19 vaccines in the US. These results are consistent with the investor sentiment hypothesis and the asset-pricing perspective. The empirical results also show a higher stock market reaction to the announcement of the effectiveness of the Pfizer-BioNTech COVID-19 vaccine in the US compared to the announcements of the effectiveness of subsequent vaccines. This result is explained by the innovation race competition effect and the greater reduction in investor uncertainty levels. These reactions were reinforced or mitigated by firm-specific characteristics such as liquidity, size, leverage, ownership concentration, state control and business model (i.e., low-cost versus full-service).

The impact of COVID-19 vaccination on stock market: is there any difference between developed and developing countries?

This study analyzes the impact of COVID-19 vaccination on the stock markets of 77 countries in the period March 11, 2020-October 29, 2021. Using the panel data vector autoregression (PVAR) model, we find that COVID-19 vaccination has a positive impact on stock markets of developing countries and a negative impact on developed countries. Variance decomposition results shows that COVID-19 vaccination explains 0.00022% and 0.00026% of stock market return in developed and developing countries, respectively. Our findings bear important implications: policymakers of developing countries should accelerate mass COVID-19 vaccination programs to recover stock markets, while developed country governments need to combine vaccination with other preventive measures (e.g., mask wearing in indoor public spaces) to limit the spread of the virus, especially when there is a new higher infection variant - Omicron.

Sail Away to a Safe Harbor? COVID-19 Vaccinations and the Volatility of Travel and Leisure Companies

This paper examines the impact of vaccination programs on the stock market volatility of the travel and leisure sector. Using daily data from 56 countries over the period from January 2020 to March 2021, we find that vaccination leads to a decrease in the investment risk of travel and leisure companies. Vaccination results in a decrease in the volatility of stock prices of travel and leisure companies. The drop in volatility is robust to many alternative estimation techniques, different volatility measures, and various proxies for vaccinations. Moreover, this effect cannot be explained by an array of control variables; this includes the pandemic itself and both the containment and closure policies that followed. Furthermore, the beneficial role of vaccinations is relatively stronger in emerging markets than in developed ones.