Stock market reaction to COVID-19: Evidence from U.S. Firms’ International exposure

Hue Hwa Au Yong and Elaine Laing

International Review of Financial Analysis, 2021, vol. 76, issue C

Abstract: We examine the U.S. stock market reaction to the World Health Organization's announcement declaring COVID-19 a global health emergency, with a focus on firms' international exposure. We find that while international exposure through foreign sales, foreign assets, imports and exports are significant and negatively associated with standardized cumulative abnormal returns in the short-run, the effect reverses in the long-run. In the long-run, internationalization contributes to multinational firms being more resilient to economic shocks caused by COVID-19.

Keywords: International exposure; Stock market reaction; COVID-19; Multinationality; Geographical diversification; Internationalization (search for similar items in EconPapers)
JEL-codes: F23 F30 F60 G10 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (17)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:76:y:2021:i:c:s1057521920302969

DOI: 10.1016/j.irfa.2020.101656

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