Lessons for Euro markets from the first wave of COVID-19
-
Author(s)Costas SiriopoulosLink to ORCID Index: https://orcid.org/0000-0003-1368-7182
,
Argyro Svingou
,
Jagadish DanduLink to ORCID Index: https://orcid.org/0000-0002-9211-5635
-
DOIhttp://dx.doi.org/10.21511/imfi.18(1).2021.24
-
Article InfoVolume 18 2021, Issue #1, pp. 285-298
- Cited by
- 905 Views
-
320 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
Although the coronavirus pandemic hit Europe in the early days of 2020, European stock markets had signaled fluctuations in the days before. This paper assesses the observed volatility on European stock exchanges and searches for its sources during the first four months of 2020. To investigate the issue, a panel VAR model is adopted, and the generalized impulse response function and the variance decomposition methods are used. The estimations show that about 34% of the volatility in European stock markets is due to the Chinese stock market, while 7% is due to international uncertainty, as measured by VIX. The impact of pandemic cases and deaths on European stock markets is negligible, below 1%. This means that the European stock market faced two risk elements: the first is the transmission volatility from the Chinese stock market, and the second is the international uncertainty. The findings also support the view that COVID-19 is more like a systematic risk.
- Keywords
-
JEL Classification (Paper profile tab)G15, G17, G24
-
References28
-
Tables6
-
Figures5
-
- Figure 1. COVID-19 cases per European countries
- Figure 2. Stock returns per European countries
- Figure 3.Generalized impulse response of European stock returns to COVID-19 cases and deaths, Chinese returns and VIX index
- Figure 4. Sub-periods’ generalized impulse response of European stock returns to COVID-19 cases and deaths, Chinese returns and VIX index
- Figure 5. Generalized impulse response of European stock returns to COVID-19 cases and deaths, Chinese returns and VIX index per group
-
- Table 1. Contribution of Chinese returns, COVID-19 deaths and cases, and VIX to the forecast error variance of European stock returns
- Table 2. Countries of each Group
- Table 3. Contribution of Chinese returns, COVID-19 deaths and cases, and VIX to the forecast error variance of European stock returns per group
- Table A1. Country and indices sample
- Table A2. Confirmed COVID-19 cases, deaths and market volatility
- Table A3. Panel data unit root test
-
- Ali, M., Alam, N., & Rizvi, S. A. R. (2020). Coronavirus (COVID-19) – An epidemic or pandemic for financial markets. Journal of Behavioral and Experimental Finance, 27, 100341.
- Al-Awadhi, A. M., Al-Saifi, K., Al-Awadhi, A., &Alhamadi, S. (2020). Death and contagious infectious diseases: Impact of the COVID-19 virus on stock market returns. Journal of Behavioral and Experimental Finance, 100326.
- Albulescu, C. (2020). Coronavirus and Financial Volatility: 40 Days of Fasting and Fear.
- Akhtaruzzaman, M., Boubaker, S., &Sensoy, A. (2020). Financial contagion during COVID–19 crisis. Finance Research Letters, 38,101604.
- Ashley, R. A., & Patterson, D. M. (1986). A nonparametric, distribution-free test for serial independence in stock returns. Journal of Financial and Quantitative Analysis, 21(2), 221-227.
- Baker, S. R., Bloom, N., Davis, S. J., & Terry, S. J. (2020). Covid-induced economic uncertainty (No. w26983). National Bureau of Economic Research.
- Berkman, H., Jacobsen, B., & Lee, J. B. (2011). Time-varying rare disaster risk and stock returns. Journal of Financial Economics, 101(2), 313-332.
- Changqing, L., Chi, X., Cong, Y., & Yan, X. (2015). Measuring financial market risk contagion using dynamic MRS-Copula models: The case of Chinese and other international stock markets. Economic Modelling, 51, 657-671.
- Chen, M. P., Lee, C. C., Lin, Y. H., & Chen, W. Y. (2018). Did the SARS epidemic weaken the integration of Asian stock markets? Evidence from smooth time-varying cointegration analysis. Economic research-Ekonomskaistraživanja, 31(1), 908-926.
- Corbet, S., Larkin, C., & Lucey, B. (2020). The contagion effects of the COVID-19 pandemic: Evidence from Gold and Cryptocurrencies. Finance Research Letters, 101554.
- Fernandes, N. (2020). Economic effects of coronavirus outbreak (COVID-19) on the world economy.
- Fotiadis, A., Polyzos, S., & Huan, T. C. T. (2021). The good, the bad and the ugly on COVID-19 tourism recovery. Annals of Tourism Research, 87, 103117.
- Grubel, H. G., &Fadner, K. (1971). The interdependence of international equity markets. The Journal of Finance, 26(1), 89-94.
- Hanif, W., Mensi, W., & Vo, X. V. (2021). Impacts of COVID-19 outbreak on the spillovers between US and Chinese stock sectors. Finance Research Letters, 101922.
- Ichev, R., &Marinč, M. (2018). Stock prices and geographic proximity of information: Evidence from the Ebola outbreak. International Review of Financial Analysis, 56, 153-166.
- Kollias, C., Papadamou, S., &Siriopoulos, C. (2013). European markets’ reactions to exogenous shocks: A high frequency data analysis of the 2005 London bombings.International Journal of Financial Studies, 1(4), 154-167.
- Lee, J. W., &McKibbin, W. J. (2004, April). Estimating the global economic costs of SARS. In Learning from SARS: preparing for the next disease outbreak: workshop summary (p. 92). Washington, DC: National Academies Press.
- Loh, L. (2013). Co-movement of Asia-Pacific with European and US stock market returns: A cross-time-frequency analysis. Research in International Business and Finance, 29, 1-13.
- Nippani, S., & Washer, K. M. (2004). SARS: a non-event for affected countries’ stock markets? Applied Financial Economics, 14(15), 1105-1110.
- Sharif, A., Aloui, C., & Yarovaya, L. (2020). COVID 19 pandemic,oil prices, stock market, geopolitical risk and policy uncertainty nexus in the US economy: Fresh evidence from the wavelet-based approach. International Review of Financial Analysis.
- Papadamou, S., Fassas, A., Kenourgios, D., &Dimitriou, D. (2020). Direct and Indirect Effects of COVID-19 Pandemic on Implied Stock Market Volatility: Evidence from Panel Data Analysis.
- Philippas, D., &Siriopoulos, C. (2013). Putting the “C” into crisis: Contagion, correlations and copulas on EMU bond markets. Journal of International Financial Markets, Institutions and Money, 27, 161-176.
- Reis, P. M. N., &Pinho, C. (2020). COVID-19 and investor sentiment influence on the US and European countries sector returns. Investment Management & Financial Innovations, 17(3), 373.
- Siddiqui, T. A., Ahmed, H., & Naushad, M. (2020). Diffusion of COVID-19 impact across selected stock markets: a wavelet coherency analysis. Investment Management & Financial Innovations, 17(4), 202-214.
- Vasileiou, E., Samitas, A., Karagiannaki, M., & Dandu, J. (2020). Health risk and the efficient market hypothesis in the time of COVID-19. International Review of Applied Economics, 1-14.
- Zhang, D., Hu, M., & Ji, Q. (2020). Financial markets under the global pandemic of COVID-19. Finance Research Letters, 36, 101528.
- Zaremba, A., Kizys, R., Aharon, D. Y., & Demir, E. (2020). Infected Markets: Novel Coronavirus, Government Interventions, and Stock Return Volatility around the Globe. Finance Research Letters, 101597.
- Zhou, X., Zhang, W., & Zhang, J. (2012). Volatility spillovers between the Chinese and world equity markets. Pacific-Basin Finance Journal, 20(2), 247-270.
-
Starbucks coffee corporation’s marketing response to the COVID-19 pandemic
Conner V. Lombardi ,
Neejad T. Chidiac ,
Benjamin C. Record
doi: http://dx.doi.org/10.21511/im.17(2).2021.16
Innovative Marketing Volume 17, 2021 Issue #2 pp. 177-188 Views: 15094 Downloads: 14857 TO CITE АНОТАЦІЯThe ongoing COVID-19 pandemic has a significant influence on businesses and marketing strategies across the globe, including Starbucks Coffee. The COVID-19 pandemic has been completely novel in its unprecedented impact on the modern globalized economy. This in-depth analysis of this coffeehouse provides recommendations that were carefully considered within the context of the current public health crisis. The objective of this study was to systematically analyze the strategic marketing approach of Starbucks Coffee to generate recommendations that can not only be applied to Starbucks but marketing endeavors more broadly. A comprehensive review approach was adopted beginning with a thorough situational analysis. Problems and opportunities related to the marketing of Starbucks Coffee were investigated and recommendations were generated. All stages of the study were robustly supported with relevant citations. Starbucks has matrixed a complex corporate structure that supports not only its survival but its continued development even in an increasingly dense and competitive marketplace. While Starbucks must continue to intermittently reevaluate its key problems and key opportunities, especially in the approaching few financial years, the company is operating with impressive effectiveness through the adversities of 2020 thus far. After a careful analysis, Starbucks Coffee should increase the distribution of products that are more likely to succeed during the COVID-19 pandemic, expand pick-up and delivery services, implement additional store locations in underdeveloped geographic market segments, and utilize its vast array of promotional mediums to optimize brand positioning as they approach a reopening world.
-
The impact of COVID-19 on the transportation and logistics industry
Dalia Perkumiene ,
Agbonmere Osamede ,
Regina Andriukaitienė ,
Olegas Beriozovas
doi: http://dx.doi.org/10.21511/ppm.19(4).2021.37
Problems and Perspectives in Management Volume 19, 2021 Issue #4 pp. 458-469 Views: 5631 Downloads: 9927 TO CITE АНОТАЦІЯIn this present age of globalization, the logistics and transportation industry has become an integral part of most businesses/firms as it is aimed at ensuring the effective movement of people, distribution of goods and services from one location to another on time. Therefore, this paper aims to analyze the impact of COVID-19 on the logistics and transportation sectors. The qualitative research approach was adopted using analysis and synthesis of scientific literature, data from news reports, organizational sites, and a case study of data contents. The paper presented the analysis of negative and positive effects of COVID-19 on the logistics and transportation industry. The study also discusses possible strategies and further steps for improvement of the logistics and transportation sector, including the automation and introduction of other technologies, a sustainable and flexible transportation system, cooperation of logistics and transportation business. Findings regarding the positive implications of COVID-19 show noticeable advancements in the logistics and transportation sector, such as the rise of e-commerce businesses with efficient delivery options, and the development of 3rd party logistics services as more companies outsource supply chain operations. The study revealed the importance of strategic planning with a joint effort from the research centers, public sector, private sector, and educational institutions as one of the proposed solutions for the logistics and transportation industry.
-
The impact of social distancing policy on small and medium-sized enterprises (SMEs) in Indonesia
Muhtar Lutfi ,
Pricylia Chintya Dewi Buntuang ,
Yoberth Kornelius ,
Erdiyansyah ,
Bakri Hasanuddin
doi: http://dx.doi.org/10.21511/ppm.18(3).2020.40
Problems and Perspectives in Management Volume 18, 2020 Issue #3 pp. 492-503 Views: 3404 Downloads: 1267 TO CITE АНОТАЦІЯThis study aims to investigate the impact of social distancing policies on SMEs in Indonesia. It used a quantitative method with a survey design. Respondents were all SMEs in Indonesia that are affected by social distancing policies during the COVID-19 pandemic. It involved a total of 587 SME samples selected randomly. The data were collected through observations, questionnaires, and literature studies. The collected data were analyzed using descriptive statistics with SPSS software to determine the mean value. The result showed that social distancing policies affect SMEs during the COVID-19 pandemic. This is indicated by the decreasing income and demand for SMEs products, and even some have no income (mean values of 2.40) due to the social distancing policies. Besides, the policy’s impact is also shown in the increasing cost of raw materials and production costs due to supply chain problems (mean values of 4.79). The policy’s impact raises anxiety for SMEs to survive so that business actors change their plans by utilizing information technology (mean values of 4.81). This change is a strategy to survive due to the impact of the applied policies. Although social distancing policies affect SMEs’ survival during the pandemic, research findings show that SMEs in Indonesia did not terminate employment (mean values of 4.37) due to the presence of economic stimulus policies that helped SMEs survive and grow during the COVID-19 pandemic.
