Modern health pandemic crises and stock price crash risk

Kung-Cheng Ho, Chia-ling Yao, Chenfang Zhao and Zikui Pan

Economic Analysis and Policy, 2022, vol. 74, issue C, 448-463

Abstract: This study investigates the impact of modern health pandemics on the firm’s stock price crash risk. Further, the study explores this problem using a comprehensive cross-country sample of 265,983 firm–year​ observations, collected from 39 countries during the five modern health crises: SARS (2003), H1N1 (2009), MERS (2012), Ebola (2014), and Zika (2016). Empirically, this study observes that the outbreak of pandemic crises curbs the crash risk of stock price. The more stable country is protected by the regulatory system, and the decrease in crash risk is smaller during the pandemic. The conclusions will enable the investors to trade with greater rationality and objectivity during the current pandemic situation caused by COVID-19. In addition, these conclusions make regulators confident that establishing a sound regulatory and legal system and maintaining national stability effectively reduce the impact of a sudden public crisis on the capital market.

Keywords: Modern health pandemics crises; Crash risk; Regulatory protection; National stability (search for similar items in EconPapers)
JEL-codes: F39 G14 G28 G33 M41 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S031359262200039X
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:74:y:2022:i:c:p:448-463

DOI: 10.1016/j.eap.2022.03.010

Access Statistics for this article

Economic Analysis and Policy is currently edited by Clevo Wilson

More articles in Economic Analysis and Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().