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Airline stock markets reaction to the COVID-19 outbreak and vaccines: An event study

This paper examines the short-term market reaction of the airline industry to the declaration of COVID-19 as a global pandemic and to the announcements of the effectiveness of COVID-19 vaccines in the US. Using an event study, we observe a negative and statistically significant stock price reaction...

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Detalles Bibliográficos
Autores principales: Martins, António Miguel, Cró, Susana
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Elsevier Ltd. 2022
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9393161/
https://www.ncbi.nlm.nih.gov/pubmed/36034526
http://dx.doi.org/10.1016/j.jairtraman.2022.102281
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author Martins, António Miguel
Cró, Susana
author_facet Martins, António Miguel
Cró, Susana
author_sort Martins, António Miguel
collection PubMed
description This paper examines the short-term market reaction of the airline industry to the declaration of COVID-19 as a global pandemic and to the announcements of the effectiveness of COVID-19 vaccines in the US. Using an event study, we observe a negative and statistically significant stock price reaction to the announcement of COVID-19 as a global pandemic. In contrast, we find a positive impact on the stock market due to the announcements of the effectiveness of COVID-19 vaccines in the US. These results are consistent with the investor sentiment hypothesis and the asset-pricing perspective. The empirical results also show a higher stock market reaction to the announcement of the effectiveness of the Pfizer–BioNTech COVID-19 vaccine in the US compared to the announcements of the effectiveness of subsequent vaccines. This result is explained by the innovation race competition effect and the greater reduction in investor uncertainty levels. These reactions were reinforced or mitigated by firm-specific characteristics such as liquidity, size, leverage, ownership concentration, state control and business model (i.e., low-cost versus full-service).
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spelling pubmed-93931612022-08-22 Airline stock markets reaction to the COVID-19 outbreak and vaccines: An event study Martins, António Miguel Cró, Susana J Air Transp Manag Article This paper examines the short-term market reaction of the airline industry to the declaration of COVID-19 as a global pandemic and to the announcements of the effectiveness of COVID-19 vaccines in the US. Using an event study, we observe a negative and statistically significant stock price reaction to the announcement of COVID-19 as a global pandemic. In contrast, we find a positive impact on the stock market due to the announcements of the effectiveness of COVID-19 vaccines in the US. These results are consistent with the investor sentiment hypothesis and the asset-pricing perspective. The empirical results also show a higher stock market reaction to the announcement of the effectiveness of the Pfizer–BioNTech COVID-19 vaccine in the US compared to the announcements of the effectiveness of subsequent vaccines. This result is explained by the innovation race competition effect and the greater reduction in investor uncertainty levels. These reactions were reinforced or mitigated by firm-specific characteristics such as liquidity, size, leverage, ownership concentration, state control and business model (i.e., low-cost versus full-service). Elsevier Ltd. 2022-10 2022-08-22 /pmc/articles/PMC9393161/ /pubmed/36034526 http://dx.doi.org/10.1016/j.jairtraman.2022.102281 Text en © 2022 Elsevier Ltd. All rights reserved. Since January 2020 Elsevier has created a COVID-19 resource centre with free information in English and Mandarin on the novel coronavirus COVID-19. The COVID-19 resource centre is hosted on Elsevier Connect, the company's public news and information website. Elsevier hereby grants permission to make all its COVID-19-related research that is available on the COVID-19 resource centre - including this research content - immediately available in PubMed Central and other publicly funded repositories, such as the WHO COVID database with rights for unrestricted research re-use and analyses in any form or by any means with acknowledgement of the original source. These permissions are granted for free by Elsevier for as long as the COVID-19 resource centre remains active.
spellingShingle Article
Martins, António Miguel
Cró, Susana
Airline stock markets reaction to the COVID-19 outbreak and vaccines: An event study
title Airline stock markets reaction to the COVID-19 outbreak and vaccines: An event study
title_full Airline stock markets reaction to the COVID-19 outbreak and vaccines: An event study
title_fullStr Airline stock markets reaction to the COVID-19 outbreak and vaccines: An event study
title_full_unstemmed Airline stock markets reaction to the COVID-19 outbreak and vaccines: An event study
title_short Airline stock markets reaction to the COVID-19 outbreak and vaccines: An event study
title_sort airline stock markets reaction to the covid-19 outbreak and vaccines: an event study
topic Article
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9393161/
https://www.ncbi.nlm.nih.gov/pubmed/36034526
http://dx.doi.org/10.1016/j.jairtraman.2022.102281
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