The impact of government policy responses on airline stock return during the COVID-19 crisis

This study investigates the impact of government policies on the weekly stock returns of 73 global airline companies in 36 countries during the COVID-19 pandemic. Using panel data estimation techniques with country and week fixed effects, we find that the overall government policies and containment and health policies increase airline stock returns. Economic support policies do not significantly impact the returns. Containment and health policies mitigate the negative effect of the pandemic on airline stock returns, whereas economic support policies strengthen the adverse effect. The government interventions' impact on airline stock returns is heterogeneous based on the headquarters but not on the airline's ownership structures and business operations. Our empirical findings provide salient insights for protecting airline companies by reflecting on which government policy responses are effective and how governments should invest and prioritize policies. The results also present practical implications for airline managers, investors, and policymakers concerned with the current pandemic and future crises.

Does a Government Response to COVID-19 Hurt the Stock Price of an Energy Enterprise?

This research examines the shock of a government response to COVID-19 on the stock prices of 30 international energy enterprises spanning from January 1, 2020 to December 31, 2020. Overall, the empirical results denote that a government response stringency index, containment and health index, and economic support index all have a statistically significant negative impact on their stock prices. The negative impact from the containment and health index is especially the greatest, implying that a government's stringent responses have great negative effect on the stock prices of most energy enterprises.

Effect of COVID-19 on hotel performance: role of government

Purpose: The study has two objectives, first, to examine the effect of COVID-19 deaths and corruption on the government's policy responses, and second, to investigate the effect of COVID-19, corruption and government response on hotel performance, using the developmental system's framework of resilience theory. Design/methodology/approach: The study utilizes hotel data from ten countries collected from 1st March 2020 to 28th February 2021. The data are analyzed using the panel regression analysis in E-views. Findings: The study confirms that government policies direct impact the hotel performance. Specifically, economic support policies have a positive effect on hotel performance, while COVID-19 deaths and restrictions have a negative impact on hotels. The study also found a strong association between corruption and the level of restrictions that governments choose to implement. Therefore, for effective recovery, governments must be mindful of the context in which businesses operate and the effect of their policies on the hotel industry. Practical implications: The strong correlation between COVID-19 deaths and RevPAR highlights the significance of understanding and addressing customers' risk perception to enhance the resilience of the hotel industry. The findings emphasize the importance of collaboration between the hotel industry and the government for effective crisis management and policymaking. Originality/value: This study empirically examines how various policy responses and crisis levels impact hotel performance. It sheds light on why countries respond to crises differently and the effects of different policy responses on the hotel industry. The study has many implications for the industry stakeholders and policymakers. © 2023, Emerald Publishing Limited.

Government Interventions and Sovereign Bond Market Volatility during COVID-19: A Quantile Analysis

We test the interaction between governments' COVID-19 interventions, COVID-19-induced uncertainty, and the volatility of sovereign bonds. Different from previous literature, we investigate the asymmetric response of bond market volatility to both governmental interventions and COVID-19-induced uncertainty. With a focus on the first waves of the pandemic and using a panel quantile approach and a comprehensive dataset of 31 countries worldwide, we document that containment and closure policies tend to amplify volatility. Furthermore, the price variability is augmented by the spread of the pandemic itself. On the contrary, economic support policies have a substantial stabilizing effect on bond price fluctuations. Both phenomena are not subsumed by additional control variables and are robust to multiple considerations. Our findings may serve financial market participants in their risk management decisions, as well as policymakers to better shape their preparedness for future pandemics. © 2023 by the authors.

A shot in the arm: Economic support packages and firm performance during COVID-19

We use firm-level data to provide some early evidence on the effectiveness of COVID-19 economic policy packages. Our empirical strategy relies on the varying degree of vulnerability to the pandemic across industries. We find a robust association of fiscal support with changes in firm performance indicators (as measured by sales-to-assets ratio, profit margin, interest coverage ratio as well as probability of default) in pandemic-prone sectors. We also observe marginal effects of monetary policy on the sales-to-assets ratio and of foreign exchange intervention on the interest coverage ratio in the hardest-hit firms. These results broadly survive a battery of exercises to address endogeneity. Additionally, we show that firms with a better financial position are more likely to take advantage of the support packages to withstand the pandemic shock. Overall, this preliminary evidence suggests that policy interventions have bought time for the hardest-hit industries, by supporting turnover and improving liquidity. © 2022 Elsevier B.V.

Governments' economic support for households during the COVID-19 pandemic and consumer confidence.

To combat the adverse consequences of the COVID-19 pandemic, governments have implemented various economic policies. This study examines how different types of government economic support for households are associated with consumer confidence. Utilizing data from 35 countries in the Organization for Economic Co-operation and Development for January 2020-October 2021 and applying panel fixed effect and system generalized methods of moments regressions, we show that higher levels of government economic support lead to higher levels of consumer confidence. The results also suggest that government income support for households has a stronger impact than debt/contract relief on consumer confidence during the pandemic in the full sample. Moreover, we find that debt/contract relief is a more effective policy to boost confidence in emerging economies. Finally, COVID-19 fatalities have a significant negative effect on consumer confidence.

Support for those not affected: How macroeconomic policies have shaped COVID's impact on sectoral activity

Considering the different dynamics of the COVID-triggered real shocks and macroeconomic measures during the first two waves of the pandemic, using official quarterly data for 2020 the paper studies how economic support measures have impacted the economic performance of sectors in EU countries. The paper shows that: (1) for all analysed sectoral groups, the economic support measures effects were much smaller than the corresponding non-pharmaceutical interventions impacts;(2) sectoral groups did not receive economic support in proportion to the corresponding nonpharmaceutical interventions;(3) sectoral groups with greater non-pharmaceutical interventions did not receive even systematically bigger effects of the economic support measures;and (4) the net overall effects of the COVID-triggered measures on sectoral value added vary considerably between sectors. By evaluating the potential opportunity costs of the ‘flat' economic support activity, the study's results also help to identify measures that could eventually be implemented once the pandemic has ended to mitigate the potential opportunity costs of the sector non-specific implementation of economic support measures, which will become apparent in the recovery period following the pandemic. © 2022 Economic Society of Australia, Queensland

How has COVID-19 affected the performance of green investment funds?

This paper adopts quantile regressions to scrutinize the dynamics of green investment funds in relation to the outbreak of the COVID-19 pandemic. We use data on three of the largest green investment funds (BNP PARIBAS Funds Climate Impact, Nordea Global Climate & Environment, and AMUNDI Funds Global Ecology ESG), whose proceeds finance environmental-focused projects. We consider explicitly how different types of COVID-19 measures impact on these green assets. We show evidence that economic support due to COVID-19 has a positive effect on the green assets. The effect is especially strong when the returns are negative. We further report that strigency owing to the pandemic is also positively associated with green investment funds, but again, for negative returns. On the other hand, the effect of confirmed deaths is not as strong shows up mainly at lower quantiles. A similar results applies to infectious disease equity market volatility. We account for the broader macroeconomic environment and subject our models to a battery of sub-sample robustness checks. Our research offers interesting insights in terms of investment and portfolio diversification, that can be applied to the analysis of asset management and policy making.

Asymmetric Causal Relations Between COVID-19 Economic Supports and Real Estate Price Shocks

The goal of this study is to examine the nature of causal relations between COVID-19 related economic supports and real estate shocks in 58 countries over the period of January 1, 2020 and September 3, 2022. To carry out the research, we first decompose the positive and negative shocks of real estate prices for each country. Second, we apply the wavelet transformation to real estate price index shocks and Oxford COVID-19 Government Response Economic Support Index by using a discrete wavelet transform. Finally, we employ the fractional frequency flexible Fourier form Toda-Yamamoto causality test to obtain the causal relations. The results of the study show that in most countries, COVID-19 economic supports have causal effects on real estate prices. Real estate market reactions differ across different time periods. Most of the asymmetric responses of the market takes place in the medium-and long-term. Our results may provide valuable insights for policymakers to develop appropriate housing policies to create an environment for a stable real estate market and enhance price stability when monitoring real estate market developments. © 2022, Global Social Science Institute. All rights reserved.

The Effect of Covid-19 on the Stock Market of the Travel And Leisure Industry: Evidence from the United States

This study explores the impact of the COVID-19 pandemic on the performance of the US travel and leisure stock, using daily data sets from December 31, 2019 to December 2, 2020. Applying the multifactor model, which is an extension of the capital asset pricing model, the study examines how governmental announcements and policy measures to contain the pandemic situation impact the stock prices, controlling for confirmed cases, growth rates, and death rates owing to the pandemic. Further, to reduce the potential bias in heterogeneity, crucial macroeconomic regressors such as oil prices, exchange rates, and a volatility index are included. The study obtains a heterogeneous impact across quantiles. Government stringency measures negatively impact the travel and leisure stock prices, while the announcement of economic support programs positively impacts the stocks, particularly at the high-end quantiles. We advocate that the introduction of asset-light and fee-based strategies will enable the firms to overcome the adverse implications of the pandemic in the long run. This study offers major insights for protecting and developing the recovery of the travel and leisure stock market by considering the importance of government interventions and their effective implementation.

A shot in the arm: Economic support packages and firm performance during COVID-19

We use firm-level data to provide some early evidence on the effectiveness of COVID-19 economic policy packages. Our empirical strategy relies on the varying degree of vulnerability to the pandemic across industries. We find a robust association of fiscal support with changes in firm performance indicators (as measured by sales-to-assets ratio, profit margin, interest coverage ratio as well as probability of default) in pandemic-prone sectors. We also observe marginal effects of monetary policy on the sales-to-assets ratio and of foreign exchange intervention on the interest coverage ratio in the hardest-hit firms. These results broadly survive a battery of exercises to address endogeneity. Additionally, we show that firms with a better financial position are more likely to take advantage of the support packages to withstand the pandemic shock. Overall, this preliminary evidence suggests that policy interventions have bought time for the hardest-hit industries, by supporting turnover and improving liquidity.

Support for those not affected: How macroeconomic policies have shaped COVID’s impact on sectoral activity

Considering the different dynamics of the COVID-triggered real shocks and macroeconomic measures during the first two waves of the pandemic, using official quarterly data for 2020 the paper studies how economic support measures have impacted the economic performance of sectors in EU countries. The paper shows that: (1) for all analysed sectoral groups, the economic support measures effects were much smaller than the corresponding non-pharmaceutical interventions impacts;(2) sectoral groups did not receive economic support in proportion to the corresponding nonpharmaceutical interventions;(3) sectoral groups with greater non-pharmaceutical interventions did not receive even systematically bigger effects of the economic support measures;and (4) the net overall effects of the COVID-triggered measures on sectoral value added vary considerably between sectors. By evaluating the potential opportunity costs of the ‘flat’ economic support activity, the study’s results also help to identify measures that could eventually be implemented once the pandemic has ended to mitigate the potential opportunity costs of the sector non-specific implementation of economic support measures, which will become apparent in the recovery period following the pandemic.

The effect of COVID-19 confinement and economic support measures on the mental health of older population in Europe and Israel.

This study focuses on the impact of confinement and economic support measures on the mental health of the older population (aged 50 and above) across twenty-five European countries and Israel. While studies evaluating the effect of confinement measures on mental health exist, they largely ignore the potentially offsetting effects of economic support measures. Moreover, previous findings on the effect of confinement measures are inconsistent, and many studies are based solely on cross-sectional designs. Using data from the Corona Survey wave (2020) of the Survey on Health, Ageing and Retirement in Europe (SHARE), we leverage the date of interview information to vary individual exposure to different policy contexts within countries. Overall, we do not find support for the negative effect of confinement measures on older adults' mental health. If anything, both confinement and support measures worked in tandem to soothe mental distress, resulting from the pandemic. The confinement effects, however, are contingent on age, potentially indicating that younger people are more likely to be negatively affected by lockdowns.

The U.S. COVID-19 County Policy Database: a novel resource to support pandemic-related research.

BACKGROUND: It is increasingly recognized that policies have played a role in both alleviating and exacerbating the health and economic consequences of the COVID-19 pandemic. There has been limited systematic evaluation of variation in U.S. local COVID-19-related policies. This study introduces the U.S. COVID-19 County Policy (UCCP) Database, whose objective is to systematically gather, characterize, and assess variation in U.S. county-level COVID-19-related policies. METHODS: In January-March 2021, we collected an initial wave of cross-sectional data from government and media websites for 171 counties in 7 states on 22 county-level COVID-19-related policies within 3 policy domains that are likely to affect health: (1) containment/closure, (2) economic support, and (3) public health. We characterized the presence and comprehensiveness of policies using univariate analyses. We also examined the correlation of policies with one another using bivariate Spearman's correlations. Finally, we examined geographical variation in policies across and within states. RESULTS: There was substantial variation in the presence and comprehensiveness of county policies during January-March 2021. For containment and closure policies, the percent of counties with no restrictions ranged from 0% (for public events) to more than half for public transportation (67.8%), hair salons (52.6%), and religious gatherings (52.0%). For economic policies, 76.6% of counties had housing support, while 64.9% had utility relief. For public health policies, most were comprehensive, with 70.8% of counties having coordinated public information campaigns, and 66.7% requiring masks outside the home at all times. Correlations between containment and closure policies tended to be positive and moderate (i.e., coefficients 0.4-0.59). There was variation within and across states in the number and comprehensiveness of policies. CONCLUSIONS: This study introduces the UCCP Database, presenting granular data on local governments' responses to the COVID-19 pandemic. We documented substantial variation within and across states on a wide range of policies at a single point in time. By making these data publicly available, this study supports future research that can leverage this database to examine how policies contributed to and continue to influence pandemic-related health and socioeconomic outcomes and disparities. The UCCP database is available online and will include additional time points for 2020-2021 and additional counties nationwide.

Gender Differences in Enterprise Performance During the COVID-19 Crisis: Do Public Policy Responses Matter?: ET&P

The COVID-19 crisis has introduced unique tradeoffs between health and economic risk, leading to a “life vs. livelihoods conundrum.” This study contributes to research on adversity and entrepreneurship by examining the implications of the pandemic for gender differences in enterprise performance. We further consider how public policy responses in the domains of public health and economic support moderate the potential gendered effects of the pandemic. Data analysis of more than 20,000 enterprises across 38 countries shows that women-owned enterprises were more adversely affected by the pandemic, and that stronger public health policy responses helped reduce the observed gap in performance.

Carrot and stick: Economic support and stringency policies in response to COVID-19.

To address the economic losses caused by the COVID-19 pandemic, countries have implemented, together with policies aimed at stopping the spread of the virus, a mixture of fiscal and monetary measures. This work investigates the effect of containment policies and economic support measures on economic growth in the short run, investigating a time window of six quarters in a cross country perspective. Our results confirm the existence of a negative effect of stringency measures on GDP; we also detect a positive effect from economic support measures. Moreover, looking at the interaction between these two kinds of interventions, our findings suggest that up to a relatively low level of stringency policies, economic support measures are able to positively counterbalance the negative impact of containment and closure policies. When the level of closures became more severe, however, the economic support measures that countries adopt are not able to completely recoup, in the short run, the economic losses due to stringency policies. Results suggest that in order to have a positive net effect, policymakers should take into account the level of stringency measures implemented before investing in economic support.

Lockdown Policies, Economic Support, and Mental Health: Evidence From the COVID-19 Pandemic in United States.

During the COVID-19 pandemic, various lockdown policies were put in place by the governments in different countries and different levels, which effectively curbed the spread of the virus, but also cause substantial damage to the mental health of local residents. We use statistics provided by the Household Pulse Survey and OxCGRT between 23 April 2020 and 30 August 2021 to analyze the impact of lockdown on overall mental health levels in US states during the COVID-19 pandemic at the macro level. The results show that the lockdown policies implemented by the state governments lead to a deterioration in psychological conditions, and this relationship varies to some extent depending on the level of high-quality economic support, that the state governments implement to alleviate the symptoms of depression and anxiety associated with the lockdown. Therefore, we argue that although lockdown policies are necessary during the COVID-19 pandemic, further government efforts are needed to give high-quality economic and mental health support to mitigate the negative effects of lockdown on mental health.

Innovating European Long-Term Care Policies through the Socio-Economic Support of Families: A Lesson from Practices

TC and socio-economic deprivation of families are two relevant issues in international debate. The economic or time investment made by families in caregiving has an impact on the socio-economic status of family members in terms of economic means and social inclusion. This study analyzes the practices that are supported by home LTC, examining their characteristics, identifying their strengths, weaknesses, drivers, and barriers, as well as identifying social innovation aspects. The study provides a qualitative interpretative comparison of 22 practices from eight countries, representing the four LTC care models existing in Europe. Cross-studies aid in the development of sustainable policies. The study highlights the differences and similarities between selected practices. The results indicate the effectiveness of integrative and coordination strategies at the macro, meso, and micro levels for the development of supportive policies for family members with burdens of care. Nevertheless, the results underline the lack of a genuine focus on families’ socio-economic support for providing care. The partial support provided by compensatory cash benefits or unpaid care leave schemes partially addresses the difficulties of familial burden of care. The study recommends that fair economic compensation and social security benefits be incorporated into innovative and sustainable strategies for supporting caregiving in LTC and welfare schemes.

Evaluating the COVID-19 response policy's impact on carbon dioxide emissions in the top four CO2 emission countries

Purpose: The stringency policy and economic support policy in response to and to address the coronavirus disease 2019 have become a significant concern since the end of 2019. The motivation that led to this study is that, the selection of the stringency policy and the economic support policy appear to have brought about the opposite effects of the environmental costs of carbon dioxide emissions. The study's objective is to examine the contradictory impacts of these stringency and economic support policies on carbon dioxide emissions. Design/methodology/approach: This study applies panel data for the top four countries responsible for carbon dioxide emission, namely China, the United States of America, India and Russia. A fully modified ordinary least squares estimator and dynamic ordinary least squares estimator are employed to determine the long-run parameters. Findings: The results indicate that the effect of reduced carbon dioxide emissions due to a one-unit increase in the stringency policy is greater than the effect of increased carbon dioxide emissions caused by a one-unit increase in the economic support policy. Hence, if the two policies are implemented simultaneously, a positive net effect on environmental costs will be gained. Research limitations/implications: The study investigates in a general scope, the impact these response policies have on the environment. Future researchers may enhance the research on environmental impact in different sectors due to the implementation of both policies to enrich the analytical perspective. Practical implications: The results have provided implications for policymakers to emphasize more on stringency-oriented policies while giving economic support to the low-income or unemployed households in order to reduce carbon dioxide emissions. Originality/value: Despite the foreseen effects of the stringency policy and economic support policy, there has hardly been any studies that have explored empirically the nexus between both policies with carbon dioxide emissions in one empirical model. Furthermore, the paper uses the high-frequency data in determining the contradictory impacts of stringency policy and economic support policy on CO2 emissions. © 2022, Emerald Publishing Limited.

Pandemic Policy and Life Satisfaction in Europe.

We use data from the COME-HERE longitudinal survey collected by the University of Luxembourg to assess the effects of the policy responses to the COVID-19 pandemic on life satisfaction in France, Germany, Italy, Spain and Sweden over the course of 2020. Policy responses are measured by the Stringency Index and the Economic Support Index from the Blavatnik School of Government. Stringency is systematically associated with lower life satisfaction, controlling for the intensity of the pandemic itself. This stringency effect is larger for women, those with weak ties to the labor market, and in richer households. The effect of the Economic Support is never statistically different from zero.