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Feverish Stock Price Reactions to COVID-19


Ramelli, Stefano; Wagner, Alexander (2020). Feverish Stock Price Reactions to COVID-19. Review of Corporate Finance Studies, 9(3):622-655.

Abstract

Market reactions to the 2019 novel coronavirus disease (COVID-19) provide new insights into how real shocks and financial policies drive firm value. Initially, internationally oriented firms, especially those more exposed to trade with China, underperformed. As the virus spread to Europe and the United States, corporate debt and cash holdings emerged as important value drivers, relevant even after the Fed intervened in the bond market. The content and tone of conference calls mirror this development over time. Overall, the results illustrate how anticipated real effects from the health crisis, a rare disaster, were amplified through financial channels.

Abstract

Market reactions to the 2019 novel coronavirus disease (COVID-19) provide new insights into how real shocks and financial policies drive firm value. Initially, internationally oriented firms, especially those more exposed to trade with China, underperformed. As the virus spread to Europe and the United States, corporate debt and cash holdings emerged as important value drivers, relevant even after the Fed intervened in the bond market. The content and tone of conference calls mirror this development over time. Overall, the results illustrate how anticipated real effects from the health crisis, a rare disaster, were amplified through financial channels.

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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Banking and Finance
Dewey Decimal Classification:330 Economics
Scopus Subject Areas:Social Sciences & Humanities > Economics and Econometrics
Social Sciences & Humanities > Finance
Social Sciences & Humanities > Business and International Management
Language:English
Date:1 November 2020
Deposited On:11 Feb 2021 07:05
Last Modified:25 Feb 2021 15:38
Publisher:Oxford University Press
ISSN:2046-9128
OA Status:Hybrid
Publisher DOI:https://doi.org/10.1093/rcfs/cfaa012
Official URL:https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3550274
Related URLs:http://dx.doi.org/10.2139/ssrn.3550274 (Organisation)
https://academic.oup.com/rcfs/article/9/3/622/5868420 (Publisher)
Other Identification Number:merlin-id:20035

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