Zhifeng Liu, Peng-Fei Dai, Toan L. D. Huynh, Tingting Zhang, Guoqing Zhang
{"title":"Industries' heterogeneous reactions during the COVID-19 outbreak: Evidence from Chinese stock markets","authors":"Zhifeng Liu, Peng-Fei Dai, Toan L. D. Huynh, Tingting Zhang, Guoqing Zhang","doi":"10.1111/jifm.12166","DOIUrl":null,"url":null,"abstract":"<p>This study examines the heterogeneous effects of the COVID-19 outbreak on stock prices in China. We confirm what is already known, that the pandemic has had a significant negative impact on stock market returns. Additionally, we find, this effect is heterogeneous across industries. Second, fear sentiment can directly cause stock prices to fall and panic exacerbates the negative impact of the pandemic on stock returns. Third, and most importantly, we demonstrate the underlying mechanisms of four firm characteristics and find that those with high asset intensity, low labor intensity, high inventory-to-revenue ratio, and small market value are more negatively affected than others. For labor-intensive state-owned firms, in particular, stock performance worsened because of higher idle labor costs. Finally, we created an index to measure the relative position of an industry in the supply chain, which shows that downstream companies were more vulnerable to the effects of the pandemic.</p>","PeriodicalId":46659,"journal":{"name":"Journal of International Financial Management & Accounting","volume":null,"pages":null},"PeriodicalIF":9.4000,"publicationDate":"2022-11-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"36","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of International Financial Management & Accounting","FirstCategoryId":"91","ListUrlMain":"https://onlinelibrary.wiley.com/doi/10.1111/jifm.12166","RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 36
Abstract
This study examines the heterogeneous effects of the COVID-19 outbreak on stock prices in China. We confirm what is already known, that the pandemic has had a significant negative impact on stock market returns. Additionally, we find, this effect is heterogeneous across industries. Second, fear sentiment can directly cause stock prices to fall and panic exacerbates the negative impact of the pandemic on stock returns. Third, and most importantly, we demonstrate the underlying mechanisms of four firm characteristics and find that those with high asset intensity, low labor intensity, high inventory-to-revenue ratio, and small market value are more negatively affected than others. For labor-intensive state-owned firms, in particular, stock performance worsened because of higher idle labor costs. Finally, we created an index to measure the relative position of an industry in the supply chain, which shows that downstream companies were more vulnerable to the effects of the pandemic.
期刊介绍:
The Journal of International Financial Management & Accounting publishes original research dealing with international aspects of financial management and reporting, banking and financial services, auditing and taxation. Providing a forum for the interaction of ideas from both academics and practitioners, the JIFMA keeps you up-to-date with new developments and emerging trends.