Trust and stock market volatility during the COVID-19 crisis

Nils Engelhardt, Miguel Krause, Daniel Neukirchen and Peter N. Posch

Finance Research Letters, 2021, vol. 38, issue C

Abstract: We investigate if trust affects global stock market volatility during the COVID-19 pandemic. Using a sample of 47 national stock markets, we find the stock markets’ volatility to be significantly lower in high-trust countries (in reaction to COVID-19 case announcements). Both trust in fellow citizens as well as in the countries’ governments are of significant importance.

Keywords: COVID-19; Trust; Financial markets; Volatility (search for similar items in EconPapers)
JEL-codes: A14 G01 G10 G15 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (48)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:38:y:2021:i:c:s1544612320316871

DOI: 10.1016/j.frl.2020.101873

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