The Impact of Strict Cancellation of Public Events Policy on the Stock Market Globally During the COVID-19: An Event Study

Kefan Jiang


The article aims to evaluate the impact of cancellation of public events policy on the stock markets on a global scale. Three questions related to the policy would be researched. First, what are the patterns of the thirty countries’ abnormal returns during the event window? Second, how to explain the patterns of the average abnormal return and cumulative abnormal return of the sample during the event window? Third, does the strict cancellation of public events have a positive impact on the stock markets in terms of abnormal return? Researcher finds that the policy on aggregate has a negative impact on the stock markets among the thirty countries in the short term while a positive impact on the stock markets in the long term. The results indicate that the investors at first consider the policy would reduce economic activities so as to lead a negative effect on stock markets, but the policy has a great positive impact on restricting the growth of the confirmed cases due to COVID-19 which boosts the investors’ confidence on resumption of economic activities. Finally, the stock indices have a upward trend after the announcement of policy in the long term. The article can provide investment advice for investors when governments imposing the policy. The investors can invest in the stock indices on a global scale when there is a deep decrease in the stock markets due to the policy. Then it would earn a positive return around 20 days later.


Event Study; COVID-19; Abnormal Returns; Cancellation of Public Events

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DOI: http://dx.doi.org/10.18282/ff.v10i4.2220


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