ABSTRACT
Purpose: The purpose of this paper is to investigate the dynamic relationship between 19 pandemic and government actions, such as governmental response index and economic support packages. Design/methodology/approach: The authors use a panel dataset of 10 American and Latin countries for the period spanning from January 2020 to April 2021 to analyze the effect of government actions on stock market returns. The authors provide robust test results that improve the understanding of the impact of the pandemic on stock market indices through the break-up structure method and the new measure of Covid-19 extracted from Narayan et al. (2021) study. Findings: Empirical results show the harmful effect of the corona virus on stock prices, hence the risk adverse behavior of investors. On the other hand, the quantitative approach reveals that the positive impact of government actions is degraded during Covid-19. Originality/value: This article highlight that government actions may be effective in reducing new infections but could generate perverse economic impact through increasing uncertainty. The authors conclude that the adjustment of macroeconomic factors and the integration of financial news improve the forecasting performance of the model based on health news. © 2022, Emerald Publishing Limited.
ABSTRACT
Purpose: The purpose of this paper is to investigate the impact of COVID-19 pandemic on the changing relationship between technology and economic activity in MENA countries. Design/methodology/approach: The generalized method of moments (GMM) was applied to explore the presence of dynamic causality between technology, inflation, unemployment, foreign direct investment, trade opening, gross fixed capital formation and economic growth for 14 MENA countries before and after COVID-19. Findings: Empirical evidence shows that the economic predictor variables change signs and impact negatively the economic growth as a result of the adverse consequences of the MENA health crisis. More interestingly, there is a unique, positive, meaningful relationship between ICT and economic growth. Originality/value: The results show that economic resilience in MENA is significantly affected by digital infrastructure during the epidemic crisis. The authors conclude that macroeconomic adjustment and innovation improve the predictive performance of the health news model. Countries could take strong measures to support new strategies to strengthen their innovation competitiveness. © 2022, Ines Abdelkafi, Youssra Ben Romdhane and Haifa Mefteh.
ABSTRACT
Purpose: The purpose of this paper is to investigate the dynamic relationship between 19 pandemic and government actions, such as governmental response index and economic support packages. Design/methodology/approach: The authors use a panel dataset of 10 American and Latin countries for the period spanning from January 2020 to April 2021 to analyze the effect of government actions on stock market returns. The authors provide robust test results that improve the understanding of the impact of the pandemic on stock market indices through the break-up structure method and the new measure of Covid-19 extracted from Narayan et al. (2021) study. Findings: Empirical results show the harmful effect of the corona virus on stock prices, hence the risk adverse behavior of investors. On the other hand, the quantitative approach reveals that the positive impact of government actions is degraded during Covid-19. Originality/value: This article highlight that government actions may be effective in reducing new infections but could generate perverse economic impact through increasing uncertainty. The authors conclude that the adjustment of macroeconomic factors and the integration of financial news improve the forecasting performance of the model based on health news. © 2022, Emerald Publishing Limited.