Investor Sentiment and Stock Market Reactions to COVID-19: Evidence from China

This paper treats the outbreak of coronavirus disease 2019 (COVID-19) as a natural experiment that can provide insights into the effects of investor sentiment on stock market reactions. Employing the event study methodology (ESM) and taking the date of the Wuhan lockdown as the event date, we find that average abnormal return (AAR) and cumulative abnormal return (CAR) are significantly negative, and average trading volume excesses far more than before within two days of the outbreak. Further, we establish a difference-in-differences (DID) model to investigate the differences between Hubei and non-Hubei listed companies. The results show that for Hubei listed companies, the change of excessive trading volume (ETV) between pre-event and post-event period is significantly higher than that of non-Hubei listed companies, while there exhibits no relationship between the change of AAR and registration place. Overall, our findings provide new evidence for the interaction of local bias and investor sentiment affecting stock market reactions. [ FROM AUTHOR] Copyright of Discrete Dynamics in Nature & Society is the property of Hindawi Limited and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full . (Copyright applies to all s.)

Restart economy in a resilient way: The value of corporate social responsibility to firms in COVID-19

This paper investigates the importance of corporate social responsibility (CSR) to firms in COVID-19. Using data from listed companies in China, we find that a high-level of CSR is conducive to improving stock returns. Importantly, the mechanism analysis shows that corporate social responsibility can bring social trust capital to enterprises, and it can improve the corporate performance during the epidemic. Additional tests show that the impacts of employee protection and environmental protection responsibilities on stock returns are even more significant. Our findings reveal the importance of the socially responsible investing and have important policy implications. © 2022 Elsevier Inc.