Does COVID-19 pandemic hurt stock prices of solar enterprises?

Abstract

This research examines the relationships between stock prices of solar enterprises and the COVID-19 pandemic for 18 enterprises from OECD countries and 3 enterprises from non-OECD countries from January 2, 2020 to March 8, 2021. The empirical results show that there exists a cointegration relationship between the pandemic and solar stock prices. Moreover, the effects of COVID-19 pandemic on solar stock prices exhibit heterogeneity, as the COVID-19 pandemic affects solar stock prices negatively in the full sample and OECD countries, whereas the pandemic negatively affects solar stock prices in both the short run and long run, but the effects are not significant in non-OECD countries. We conduct a series of robustness tests, including changing variables and employing the Markov switching regression for time-series analysis, and the results support our main findings. According to the empirical results, investors should be prudent about investing in solar enterprises, while policymakers should balance pandemic control and maintain economic performance when implementing prevention policies.