COVID-19 pandemic effect on trading and returns: Evidence from the Chinese stock market PMC

trading coronavirus

Early theory characterizes foreign investors as uninformed traders as it is costlier for them to access the local information. Thus, the extrapolative strategy is adopted, which shows the pattern of the positive feedback trading (Froot et al., 2001, Griffin et al., 2004). However, Hau and Rey, 2004, Hau and Rey, 2006 predict a negative relationship due to portfolio rebalancing.. To match the firm-level trade data with the list of outdoor consumption goods, we collapsed the former at the harmonized system (HS) six-digit classification. To avoid the effect of outliers, we restricted the sample to the top-80 destinations (origins) of Spanish exports (imports) in 2019, although the final sample was reduced to 79 export destinations and 78 import origins due to the lack of containment measures data for some countries. Even the coefficient for workplace closing, the containment measure most closely related with a disruption in supply, was zero.

trading coronavirus

Trade, integral to growth and economic development, is under pressure as a result of the COVID-19 pandemic. As most countries take measures to protect their citizens from the virus, economies are suffering from resulting drops in production and consumption. This is further exacerbated as each country’s slowdown also contributes to the drop in trade, which in turn amplifies the economic challenge with cross-border demand and supply shocks. The economic pain from the virus could be especially severe in some emerging market and developing economies. (1) when dealing with the causal effects of various measures of market quality on information asymmetry, Frijns et al. (2015) proposed a panel GMM approach.

Global business/ civil society response to COVID-19

Receiving protection against export restrictions would thus provide an incentive for nations to join the CVITA. Trade has also enabled the cross-border transfer of technology and development of brand new supply chains for COVID-19 vaccine manufacturing. Table 1 shows that the number of export bans imposed in 2020 was at least 50 times higher than the average in the five previous pre-pandemic years (2015 through 2019). Having written this, export bans and export licensing requirements saw the biggest percentage increases in harmful intervention. These measures were applied—often only for a short period of time—to trade in medical equipment (such as ventilators), medical consumables (such as personal protective equipment, of which masks are an example), and other COVID-19 medical materials and goods. However, a different conclusion emerges once attention is focused on higher profile import restrictions (tariffs, antidumping actions, anti-subsidy measures, tariffs on import surges, import quotas, government procurement measures, and local content requirements, etc.).

trading coronavirus

Using a daily foreign and institution flows data, this paper studies how institutional and foreign investors respond to the COVID-19 pandemic events in China. The results indicate that during the COVID-19 crisis foreign investors play a market stabilization role showing significant negative feedback trading, whereas institution investors do not stabilize the market. And compared to the pre-COVID-19 period, foreign investors even exhibit stronger negative feedback trading.

Conclusions and policy recommendations

The WTO-IMF Vaccine Trade Tracker provides data on the trade and supply of COVID-19 vaccines by product, economy and arrangement type. The tracker builds on the work of the WTO Secretariat information notes on COVID-19 and world trade and the IMF Staff Discussion Note – A Proposal to End the COVID-19 Pandemic. The time is now for the US Trade Representative, EU Trade Commissioner, and other trade ministers to become more engaged. The world economy is suffering trillions of dollars of losses due to the ongoing pandemic. Policymakers at the highest levels in major vaccine-manufacturing economies have now recognized the need for enhanced cooperation and engagement. Significant steps began in March 2021 and have accelerated since, albeit in a disorganized fashion and not in concert with the WTO.

  • Imports were lower in January, but higher in February, relative to 2019 (Panel (b) of Fig.
  • Cumulative impulse responses of returns to foreigners’ (first row) and institutional (second row) buying and selling.
  • There were another 17 countries that also reported Covid-19 cases, but the number of infected individuals was very small.
  • An informed public is better positioned to make sound decisions including on questions related to trade.
  • As part of the COVID-19 Policy Briefing Series, this webinar will explore maritime trade landscape in the Commonwealth and demonstrate how maritime trade and shipping can help to revitalise Commonwealth trade post-COVID.
  • In these circumstances, there can be no systematic recourse to the notion of force majeure.

The impact coefficient is higher in absolute values across the 90th quantile compared to the 50th quantile. We report a negative relationship between PIN and its previous values, which contradicts the findings of Chen et al. (2007) for NYSE. This empirical fact indicates that any sign of informed trading arising on the Bucharest Stock Exchange during a certain week is forcing other informed traders to “exit the game” in the next period. However, the estimates are statistically significant across the lower and medium quantiles, i.e., when the level of informed trading is rather moderate. Thus, the capital markets signal the possibility to earn systematic abnormal earnings based on informational asymmetry and, consequently, they quickly disappear.

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