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Covid-19 and firms’ stock price growth: The role of market capitalization
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Abstract
This paper studies the role of capitalization on firms’ stock price growth in response to new
cases of Covid-19 infections in the United States. Controlling for firm and time fixed effects,
our panel model estimates show that the effect of new cases of Covid-19 infections on firms’
stock price growth is significantly increasing in capitalization: For each one standard deviation
increase in capitalization, a one standard deviation increase in new cases of Covid-19 infections
increases the weekly growth rate of firms’ stock prices by about 0.7 percentage points. Effects
of capitalization on the impact that Covid-19 infections have on firms’ stock price growth are
largest in the travel, tourism, and hospitality sector. Smaller but still positive effects of
capitalization are present in the pharmaceutical products, high-tech, and banking and finance
sectors.
Item Type: | Report (Discussion Paper) |
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Authors/Creators: | Brueckner, M and Kang, W and Vespignani, JL |
Keywords: | Covid-19, performance of firms, stock market capitalization, U.S. stock market |
Publisher: | University of Tasmania |
Copyright Information: | Copyright 2021 University of Tasmania |
Additional Information: | Discussion Paper Series N 2021-09 |
Item Statistics: | View statistics for this item |
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