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. 2022 Jul:82:102168.
doi: 10.1016/j.irfa.2022.102168. Epub 2022 Apr 26.

How does China's stock market react to supply chain disruptions from COVID-19?

Zhixuan Wang  1 , Yanli Dong  1 , Ailan Liu  2
Affiliations

How does China's stock market react to supply chain disruptions from COVID-19?

Zhixuan Wang et al. Int Rev Financ Anal. 2022 Jul.

Abstract

As a once-in-a-century global pandemic, COVID-19 severely hit the global economy and disrupted the worldwide supply chain. Based on 505 Chinese firms, we use the event study method to explore the effect of COVID-19 on the financial performance of firms. The findings show that COVID-19 has an immediate impact on Chinese firms. Hubei firms experience stronger effects than non-Hubei firms. Supply chain disruptions effects from COVID-19 are observed. Transportation industry is hit more severely than retail industry. Insurance companies experience a strong adverse effect. On the other hand, both medical and competitor firms experience significantly positive spillover effects.

Keywords: Abnormal returns; COVID-19; Event study; Supply chain disruption.

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Figures

Fig. 1
Fig. 1
CSI 300 index fluctuation. Data source: CSMAR database.
Fig. 2
Fig. 2
The fluctuation of mean CARs for Hubei and non-Hubei firms.
Fig. 3
Fig. 3
The fluctuation of mean CARs for directly and indirectly affected firms.
Fig. 4
Fig. 4
The fluctuation of mean CARs for directly and indirectly affected firms by the global spread of COVID-19.
See this image and copyright information in PMC

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