The Impact of the COVID-19 on Economic Sustainability—A Case Study of Fluctuation in Stock Prices for China and South Korea

Jialei Jiang,Seong-Taek Park,Eun-Mi Park

doi:10.3390/su13126642

Abstract

The coronavirus disease (COVID-19) pandemic has had a global impact on lives, livelihoods, and economies. This study investigates whether a contagious infectious disease can affect the prices of the Chinese and Korean stock markets. Specifically, we aim to discover discrepancies in the impact of COVID-19 on the stock prices of China and South Korea through panel data. To test these discrepancies, we first regressed the stock indices on confirmed cases and deaths. We then validated the stability of coefficients over the past days. The empirical results show that (1) responses of stock indices are stable and impulsive and (2) response patterns toward COVID-19 events considerably vary across nations, especially in the counties such as China and South Korea.

Highlights

Introduction for China and South KoreaAt the dawn of 2020, coronavirus disease 2019, or the novel coronavirus (COVID-19), became a worldwide epidemic
Sun and Sang [53] investigated the relationship between management characteristics and corporate social responsibility (CSR) by analyzing the firms listed on the Korean Stock Exchange (KSE) along with the reference for decisionmaking by relevant authorities and stakeholders; the results of this study revealed that this relationship is differentiated by the level of corporate governance
COVID-19 has caused a significant impact on stock markets across nations

Summary

Introduction

At the dawn of 2020, coronavirus disease 2019, or the novel coronavirus (COVID-19), became a worldwide epidemic. Nations struggled to respond to this deadly and mysterious pandemic, which rapidly spread around the world. This fast spread was facilitated by the greater economic integration and liquidity of the international network formed by the globalization process over the last several decades [1]. COVID-19 was first identified among patients with the signs of pneumonia in the city of Wuhan, the provincial capital of Hubei province, China, in December 2019 [2]. To prevent the spread of COVID-19, the Chinese government proposed a series of effective health policies, such as total or partial lockdown to control the pandemic.

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