Stock markets response to contagious disease: Evidence on the impact of COVID‐19 in the three worst hit African economies

Kumeka, Terver Theophilus; Adeniyi, Oluwatosin

doi:10.1002/ijfe.2660

Cited by 4 publications

(7 citation statements)

References 127 publications

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“…There is also biasedness in the convergence of OLS when we have infinite samples; (b) there are high chances of autocorrelation and heteroscedasticity occurring from OLS estimates given that omitted dynamics are accounted for by the error term, which invalidate inferences from the normal tables. Hence, the z -statistics are unreliable for the OLS estimates; and (c) another advantage is that these models deal with the issue of endogeneity (Iqbal et al, 2020; Kumeka & Adeniyi, 2022). Further, these techniques provide consistent and efficient estimation of the vector of cointegration and do not suffer from serial correlation and simultaneity biases.…”

Section: Data Model Specification and Econometric Approachmentioning

confidence: 99%

Globalisation and Inclusive Growth in Africa: The Role of Institutional Quality

Kumeka

Raifu

Adeniyi

2023

Foreign Trade Review

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This study examines the relationship between globalisation and inclusive growth by considering the modulating role of institutional quality. To achieve our broad objective, we use data from 45 African economies over 1996–2018 to determine the panel cointegration and cointegrating regression association between inclusive growth, globalisation and institutional quality. To determine a suitable estimation technique for the empirical analysis, several pre-estimation tests were conducted. After confirming the existence of cointegration and slope heterogeneity, we adapted the long-run panel cointegrating methods—the fully modified ordinary least squares and dynamic ordinary least squares estimations. The results from both show that aggregate globalisation and its various dimensions have positive and significant effects on inclusive growth. Besides the direct positive impact on inclusive growth, globalisation has indirect positive and significant impact on inclusive growth through institutional quality. Finally, some policy implications are highlighted. JEL Codes: E02, F62, F63, O15, O43

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Section: Data Model Specification and Econometric Approachmentioning

confidence: 99%

Globalisation and Inclusive Growth in Africa: The Role of Institutional Quality

Kumeka

Raifu

Adeniyi

2023

Foreign Trade Review

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Section: Africamentioning

confidence: 99%

“…Kumeka et al employed three cointegrating regression models to study the stock markets in the three African economies, Nigeria, South Africa, and Egypt, which were hardest hit by COVID-19 and strict lockdown policies [27]. The increase in new diagnoses and the number of daily deaths negatively impacted the stock markets of the three countries [27]. Furthermore, they discovered that returns were more responsive to the overall increased reported cases per day and the stringency policy than the increase in mortality in Nigeria [27].…”

Section: Africamentioning

confidence: 99%

“…The increase in new diagnoses and the number of daily deaths negatively impacted the stock markets of the three countries [27]. Furthermore, they discovered that returns were more responsive to the overall increased reported cases per day and the stringency policy than the increase in mortality in Nigeria [27]. Raifu used time series and panel approaches to investigate how the increased daily confirm.…”

Section: Africamentioning

confidence: 99%

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Impact of the Coronavirus (COVID-19) on Major Northern Hemisphere Stock Markets

Sun¹

2023

BCPBM

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As is known, the stock market plays a critical role in the development of economy all over the world even during the epidemic of Coronavirus (COVID-19). The economic risks posed by the pandemic are even more severe by the high degree of interconnectedness within the modern economic system. This paper obtains a large number of theoretical and analytical results on the impact of the outbreak on stock markets in various continents and different countries. Therefore, this paper primarily summarizes and analyzes the general effect of the pandemic on stock markets of the main countries in the Northern Hemisphere. The results of this paper are based on a review of previous literatures. It is shown that the outbreak has a generally non-positive impact on countries economy and finance, albeit a limited one, and it typically has relatively pronounced and severe effects within the initial stage.

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“…For example, Xu (2021) provides evidence that increased COVID-19 cases has a negative effect on stock returns in the United States and Canada. Kumeka and Adeniyi (2022) found that stock markets appeared to be more negatively responsive to growth in total number of COVID-19 reported cases than the growth in deaths in the case of Nigeria and South Africa. Using U.S. data, Hsu and Liao (2021) show that COVID-19 has a positive effect on stock price volatility and trading volume and that it is negatively associated with stock returns.…”

Section: Introductionmentioning

confidence: 95%

National Governance Quality, COVID-19, and Stock Index Returns: OECD Evidence

Almustafa

2022

Economies

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This research argues that national governance quality may moderate the relationship between COVID-19 and stock returns across markets. Building on the well-established relationship between COVID-19 shock and stock returns, we focus on how the quality of a country’s governance system affects the relationship between the COVID-19 crisis and stock returns. Using data from the World Governance Indicators, the World Bank, and the John Hopkins University Coronavirus Resource Centre (JHU-CRC) for 29 OECD markets from 23 January to 31 December 2020, our findings confirm this hypothesis. Our results suggest that, the estimated coefficient on the interaction term is negative (−0.004) and statistically different from zero at the 5% level of significance. This result can be inferred that the higher the national governance quality is, the weaker the effect of COVID-19 on stock returns will be. Specifically, the negative impact of COVID-19 on stock market returns was more pronounced in countries where the national governance quality index is lower. Our results also show a strong negative association between COVID-19 and stock market returns across the sample. The results are robust to changes in governance quality measures, estimation methods, and explanatory variables. The results have several policy implications such that better institutions may partially offset the adverse impact of the COVID-19 shock on stock market returns.

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Stock markets response to contagious disease: Evidence on the impact of COVID‐19 in the three worst hit African economies

Cited by 4 publications

References 127 publications

Globalisation and Inclusive Growth in Africa: The Role of Institutional Quality

Globalisation and Inclusive Growth in Africa: The Role of Institutional Quality

Impact of the Coronavirus (COVID-19) on Major Northern Hemisphere Stock Markets

National Governance Quality, COVID-19, and Stock Index Returns: OECD Evidence

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