ABSTRACT
The research aims to prioritize the pandemic's impact on the financial markets of developed and developing economies using a multi-criteria decision-making approach. The results revealed that COVID-19's pandemic effects on financial markets differ between developed and developing nations. COVID-19 pandemic affects developed countries' financial markets more through supply reduction, demand reduction, and economic instability. Regarding developing nations, confidence and expectations, changes in consumption patterns, and the bandwagon effect are the three most significant impacts of COVID-19 pandemic on financial markets. The best decisions to lower the effect of COVID-19 pandemic on developed nations' financial markets are the declaration of the stimulus package and support of small-and-medium-sized enterprises. Contrastingly, in developing countries, support for vulnerable households and declaration of the stimulus package are the best decisions to combat COVID-19's negative impact on their financial markets. As practical policy implications for lowering COVID-19's negative impact on financial markets, the promotion of new financing instruments, reconstruction of the relationship between public and private sectors, and support of vulnerable households and enterprises are highly recommended.
La recherche vise à hiérarchiser l'impact de la pandémie sur les marchés financiers des économies développées et en développement en utilisant une approche décisionnelle à plusieurs critères. Les résultats ont révélé que les effets du COVID-19 sur les marchés financiers diffèrent entre les nations développées et en développement. Le COVID-19 affecte davantage les marchés financiers des pays développés par la réduction de l'offre, la réduction de la demande et l'instabilité économique. En ce qui concerne les pays en développement, la confiance et les attentes, les changements dans les habitudes de consommation et l'effet boule de neige sont les trois impacts les plus significatifs causé par le COVID-19 sur les marchés financiers. Les meilleures décisions pour réduire l'effet du COVID-19 sur les marchés financiers des pays développés ont été la déclaration de plans de relance et le soutien aux petites et moyennes entreprises. En revanche, dans les pays en développement, le soutien aux ménages vulnérables et la déclaration de plans de relance apparaissent comme les meilleures décisions pour combattre l'impact négatif du COVID-19 sur leurs marchés financiers. En ce qui concerne les implications politiques pratiques pour réduire l'impact négatif du COVID-19 sur les marchés financiers, la promotion de nouveaux instruments de financement, la reconstruction de la relation entre les secteurs public et privé, et le soutien des ménages et des entreprises les plus vulnérables sont fortement recommandés.
ABSTRACT
The economic and social impact of covid-19 pandemic both on developing and developed countries has been significant. In addition to the impact of the pandemic, the current Ukraine war has also led to severe supply chain disruptions leading to a sharp increase in food and commodity prices globally. Due to a combination of external shocks and the impact of the pandemic global economic growth is expected to slow down from 6.1% in 2021 to 3.2% in 2022 and further to 2.7% in 2023 (IMF in: World economic outlook, International Monetary Fund, 2022). The above factors have led to a sharp increase in government expenditure constraining both developed and developing countries' fiscal capacity. This has further implications for the achievement of SDGs especially for low-income countries. The challenge for developing countries in the current scenario is to mobilise adequate resources both from domestic and international sources, not just for the achievement of SDGs as such, but also to sustain the livelihoods, health, and welfare of people. This special issue aims to examine some of these issues in the context of developing countries.
L'impact économique et social de la pandémie de COVID-19, tant sur les pays en développement que sur les pays développés, a été important. Outre l'impact de la pandémie, la guerre actuelle en Ukraine a également entraîné de graves perturbations de la chaîne d'approvisionnement, entraînant une forte augmentation des prix des denrées alimentaires et des matières premières dans le monde. En raison d'une combinaison entre chocs externes et impact de la pandémie, la croissance économique mondiale devrait ralentir de 6,1 % en 2021 à 3,2 % en 2022, puis à 2,7 % en 2023 (FMI 2022). Les facteurs ci-dessus ont conduit à une forte augmentation des dépenses publiques, limitant la capacité budgétaire des pays développés et en développement. Cela a d'autres implications pour la réalisation des ODD, en particulier pour les pays à faible revenu. Le défi pour les pays en développement dans le scénario actuel est de mobiliser des ressources adéquates provenant de sources nationales et internationales, non seulement pour la réalisation des ODD en tant que tels, mais aussi pour maintenir les moyens de subsistance, la santé et le bien-être des personnes. Ce numéro spécial vise à aborder certaines de ces questions dans le contexte des pays en développement.
ABSTRACT
As part of the artificial intelligence (AI) industry there are many companies engaged in providing hardware that enhances the use of artificial intelligence technology for big data analysis, along with companies that are involved in data analytics, software, system software, and artificial intelligence software. This paper examines the quantiles-based connectedness and non-linear causality-in-quantiles nexus of AI enterprises with basic materials and oil & gas companies, and their Islamic markets. Formally, we consider two perspectives, including before and after the pandemic of COVID-19 (for period May 18, 2018–June 01, 2022). It is observed that in the network of AI-based investments and companies related to basic materials and oil & gas industries, AI is a net recipient of shocks before and during the COVID-19 era, with a higher intensity of shock-receiving in the normal market and during COVID-19-affected period than in the upper and lower tails and prior to COVID-19 period. However, AI could serve as the cause-in-quantiles of oil & gas-related companies in the Islamic markets (in both pre-COVID-19 and COVID-19 timeframes) and conventional oil & gas firms (only within COVID-19). On the other hand, both the Islamic and the conventional basic materials and oil & gas businesses appear to be a non-linear cause-in-variance of the AI technology in the middle quantiles of the COVID-19 situation. Aside from this, the only causal factors from resources-based markets to AI are Islamic and conventional basic materials companies, as observed only during COVID-19. Based on our analysis, COVID-19 presented an excellent opportunity for improving the involvement of AI innovations with basic materials and oil & gas companies. As a consequence, the basic materials market may be able to provide hardware and software infrastructures to support the technology of artificial intelligence. Also, the inventions that enter the oil & gas industry due to the use of artificial intelligence could have a significant impact on their average performance. In this light, AI could be recognized as a strategic link in the supply chain of basic materials and oil & gas companies. There are many implications arising from these new insights for the developers of AI applications, resource policy-makers and managers, as well as investors who are interested in investing in new technologies.
ABSTRACT
The COVID-19 pandemic has posed a massive disruption to the finance sector. Islamic financial markets are no exception. We explore the resilience of Islamic financial markets to the COVID-19 pandemic vis-à-vis conventional markets. A comparative analysis of the impact of the first and second waves of COVID-19 is also conducted. We use five Dow Jones Islamic stock indices and two bond indices and their conventional counterparts as proxies of Islamic and conventional financial markets. Using wavelet, wavelet-based Granger causality, hedge ratio, optimal weights, and hedging effectiveness methods from January 1, 2019, to February 26, 2021, our empirical estimates indicate that both Islamic and conventional stock indices are almost similarly affected by the extreme market turbulence triggered by COVID-19. Hence, Islamic stock markets fail to provide diversification benefits. We also unveil no significant differences between the first and second waves of COVID-19 in the case of dependency. Conversely, Islamic bonds exhibit low dependence on their conventional counterparts, indicating their diversification benefits. We further demonstrate that Islamic and conventional bond pairs could be utilized as a strong portfolio mix because the least hedging cost and highest hedging effectiveness are observed in those portfolios, especially during COVID-19. Overall, our results suggest that global Sukuk offers more resilience in times of extreme market turmoil than other instruments considered in this study. Our findings present global investors and regulators with new insights on diversification and hedging strategy with Islamic finance during a worldwide, severe economic crisis. We present some policy recommendations in creating a more sustainable financial system post-COVID-19.
ABSTRACT
In 2020, ESG funds that invest in companies that score higher on environmental, social, and governance measures witnessed an increase in investment compared to 2019. Understanding the causal relationship and spillover between these two types of indexes may help investors determine if clean energy indexes follow the same trend as conventional indexes or the reverse. Additionally, investors would benefit from understanding this causation in both the pre- and post-Covid-19 eras. We conceive this study to plug this gap and advance the knowledge in this critical area. We study the causality and spillover between NASDAQ clean energy indexes, and their corresponding alternatives namely, NASDAQ Composite Index and NASDAQ Global Select Market Composite using the daily data and from 1 st January 2011 to 29 th June 2021. We apply the Granger-Causality test and the spillover models approach by Diebold and Yilmaz (2012) and Baruník and Křehlík (2018) to determine any medium-run, or long-run causality, and spillover between the indexes under reference, respectively. Our results suggest us to observe that both sustainable and green indexes exhibit bi-directional causality where both sets of indexes impact each other in the long-run. Additionally, after the emergence of the COVID-19 pandemic, the connectivity between the two sets of indices rose significantly. Our findings also suggest that the investors will not lose on risk-adjusted returns if they chose to go green. With the investors' ability to shift towards green investment without losing on financial returns, it shall become even easier for businesses to steer their operations.
ABSTRACT
COVID-19 pandemic has brought significant and multiple challenges for SMEs. While SMEs have traditionally faced financial and non-financial crises, the pandemic has brought about additional uncertainties on how to maintain business continuity. The purpose of this paper is to examine how SMEs can mitigate against COVID-19-related crisis by examining the impacts that the pandemic has had on them through a review of 34 articles. The thematic analysis from the literature covered three overarching and inter-related challenges including (i) cost and finance-related challenges, (ii) disruption of activities, and (iii) existential difficulties. The paper’s value lies in addressing the gap between the espoused literature’s claim of the beneficial impact of new technological advancements and SMEs’ ability to survive in the context of the COVID-19 pandemic. The additional value of this paper is a framework of recommendations to help enhance SMEs’ resilience and responsiveness in the context of COVID-19. These recommendations include collaboration, openness, taking advantage of opportunities/victory, and durability.
ABSTRACT
In this study, we examine the effect of the COVID-19 pandemic on global economic activity, the stock market, and the energy sector considering the sizable damaging impacts in these crucial aspects. Our results, based on the structural vector autoregression (SVAR) model for the data from 21 January 2020, to 26 February 2021, indicate that the COVID-19 cases significantly and negatively impact all the endogenous variables such as Baltic dry index (BDI), MSCI world index (MSCI), and MSCI world energy index (MSCIE). Our results also reveal that of the three variables, the stock markets indices (MSCI and MSCIE) are comparatively more affected by COVID-19 cases. The findings imply that the stock markets are more sensitive to the COVID-19 pandemic than the real economy. The results further indicate that of the three variables, the MSCIE index is the most affected by COVID-19 due to two factors: one is the dwindling power consumption caused by COVID-19 and the other is the decline in oil price because of the Russia–OPEC price war. Our findings enhance the understanding of the spillover impacts of the global health crisis on economic activity, the stock market, and the energy sector. Moreover, our study offers insights for policymakers and governments into the relationship dynamics of COVID-19 that would help them be more cautious in taking preventive measures against the health crisis to save the economy, the stock market, and the energy sector from falling into a more deepened crisis.