Pandemic-driven financial contagion and investor behavior: Evidence from the COVID-19

Wang, Haiying; Jin, Xiu

doi:10.1016/j.irfa.2022.102315

Cited by 35 publications

(24 citation statements)

References 81 publications

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“…Additionally, Wheeler argued that behavioral contagion occurs not only in the domain of socially unacceptable acts but also in other behavioral domains. Numerous researchers have discovered the occurrence of behavioral contagion in a variety of behavioral domains, including consumer behavior contagion, new technology adoption behavior, and financial behavior contagion ( Du and Kamakura, 2011 ; Langley et al, 2012 ; Yuan et al, 2022 ). Haidt discovered in his early studies on aversion that people’s antipathy to unpleasant things is symptomatic of their desire for and veneration of good things.…”

Section: Literature Review and Hypothesesmentioning

confidence: 99%

Transmission of environmentally responsible behavior between tourist destination employees and tourists: The role of moral elevation and environmental knowledge

2022

Front. Psychol.

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IntroductionTourists’ environmental misconduct is the primary reason for the environmental destruction that tourist sites experience; nevertheless, their environmentally responsible behavior is also a major push for the improvement of the environment. The main goal of this study is to induce tourists to adopt proactive environmental responsibility behaviors.MethodsA total of 455 valid questionnaires were obtained from China and analyzed using multiple linear regression.ResultsThe findings of this study indicate employees’ environmentally responsible behavior (E-ERB) in tourist destinations has a positive impact on tourists’ environmentally responsible behavior (T-ERB). In the mediating variable of moral elevation, the correlation between E-ERB and T-ERB is mediated by elevating emotions and views of humanity. And desire to be a better person did not play a mediating role in the relationship between E-ERB and T-ERB. Additionally, environmental knowledge moderates the transmission path of the impact of E-ERB and T-ERB via elevating emotions. With high environmental knowledge, the transmission path of the impact of employees’ environmentally responsible behavior of the tourist destination on tourists’ environmentally responsible behavior via elevating emotions will be enhanced.DiscussionWe propose a new perspective to explain the transmission mechanism between employees’ environmentally responsible behavior and tourists’ environmentally responsible behavior in tourism destinations, which will help to expand our understanding of the relationship between employees’ behavior and tourists’ behavior. We expect our study to spark more exploration of the contagion of positive behavior in the field of environmental psychology.

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Section: Literature Review and Hypothesesmentioning

confidence: 99%

Transmission of environmentally responsible behavior between tourist destination employees and tourists: The role of moral elevation and environmental knowledge

2022

Front. Psychol.

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“…The influence of VIX on GVZ gained strength during the COVID-19 outbreak, and positive shocks in VIX induced positive shocks in GVZ. Yuan et al (2022) highlighted that investor behavior, such as investor attention, sentiment and anxiety, might be a primary explanation for pandemic-driven financial contagion. The financial markets had been significantly influenced by the shifts in cognitive biases, including herding (Bouri et al , 2021; Youssef and Waked, 2022), overconfidence (Kuranchie-Pong and Forson, 2021), pessimism (Naseem et al , 2021), risk and ambiguity aversion (Nisani et al , 2022) and fear (Subramaniam and Chakraborty, 2021) during the pandemic.…”

Section: Literature Reviewmentioning

confidence: 99%

The interconnectedness across risk appetite of distinct investor types in Borsa Istanbul

Ergün

Çağlı

Salı

2022

SEF

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Purpose This study aims to investigate the interconnectedness across the risk appetite of distinct investor types in Borsa Istanbul. This study also examines the causal impact of global implied volatility indices on the risk appetite of these investor groups. Design/methodology/approach The authors use a novel time-varying frequency connectedness framework of Chatziantoniou et al. and a new time-varying Granger causality test with a recursive evolving procedure by Shi et al. over June 2008 and July 2022. Findings The results show a high level of interconnectedness across the risk appetite of different investor types. The sizable spillovers to domestic types of investors either occur from professional or foreign investors, indicating the long-term dominant effect of foreign and more qualified investors on the domestic investors in Borsa Istanbul. The authors provide significant evidence of causality from the global implied volatility to the Borsa Istanbul risk appetite indices, which are getting stronger after the COVID-19 outbreak. Originality/value Unlike the previous studies, the authors analyze the risk appetite sub-indices of various types of investors to reveal behavioral distinctions and interconnectedness across them. The authors use a novel econometric framework to assess investors’ risk appetite in different investment horizons in a time-varying system. Together with volatility index (VIX), the authors also use volatilities of oil (OVX), gold (GVZ) and currency (EVZ), considering the information transmission not only from stock markets but also energy, metals and currency markets. The present data set covers significant financial crises, socioeconomic events and the COVID-19 outbreak.

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“…Notably, the use of Google search volume index as a proxy of investor attention is especially effective in the analysis of specific events ( 10 , 15 , 74 , 75 ). As a once-in-a-century catastrophic event, the pandemic has had an immense negative impact on investor expectations ( 8 ), which has induced drastic changes in investor attention. These changes could influence investor investment decisions, and ultimately be reflected in financial market performance ( 7 ).…”

Section: Introduction and Literature Reviewmentioning

confidence: 99%

“…Due to the uncertainty of loss and the complexity of governance, along with extensive media coverage, the pandemic has had a powerful effect on investor psychology and expectations (7,8). This further changes the behavior of investors, prompting them to adjust the allocation of investment portfolios in response to the high degree of uncertainty from the pandemic (7)(8)(9).…”

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confidence: 99%

The COVID-19 pandemic and Bitcoin: Perspective from investor attention

Wan

Zhu

2023

Front. Public Health

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The response of the Bitcoin market to the novel coronavirus (COVID-19) pandemic is an example of how a global public health crisis can cause drastic market adjustments or even a market crash. Investor attention on the COVID-19 pandemic is likely to play an important role in this response. Focusing on the Bitcoin futures market, this paper aims to investigate whether pandemic attention can explain and forecast the returns and volatility of Bitcoin futures. Using the daily Google search volume index for the “coronavirus” keyword from January 2020 to February 2022 to represent pandemic attention, this paper implements the Granger causality test, Vector Autoregression (VAR) analysis, and several linear effects analyses. The findings suggest that pandemic attention is a granger cause of Bitcoin returns and volatility. It appears that an increase in pandemic attention results in lower returns and excessive volatility in the Bitcoin futures market, even after taking into account the interactive effects and the influence of controlling other financial markets. In addition, this paper carries out the out-of-sample forecasts and finds that the predictive models with pandemic attention do improve the out-of-sample forecast performance, which is enhanced in the prediction of Bitcoin returns while diminished in the prediction of Bitcoin volatility as the forecast horizon is extended. Finally, the predictive models including pandemic attention can generate significant economic benefits by constructing portfolios among Bitcoin futures and risk-free assets. All the results demonstrate that pandemic attention plays an important and non-negligible role in the Bitcoin futures market. This paper can provide enlightens for subsequent research on Bitcoin based on investor attention sparked by public emergencies.

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Pandemic-driven financial contagion and investor behavior: Evidence from the COVID-19

Cited by 35 publications

References 81 publications

Transmission of environmentally responsible behavior between tourist destination employees and tourists: The role of moral elevation and environmental knowledge

Transmission of environmentally responsible behavior between tourist destination employees and tourists: The role of moral elevation and environmental knowledge

The interconnectedness across risk appetite of distinct investor types in Borsa Istanbul

The COVID-19 pandemic and Bitcoin: Perspective from investor attention

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