The impact of COVID-19 on cultural industries: An empirical research based on stock market returns

The COVID-19 virus has challenged the development of the cultural industries seriously, so far, however few studies have used empirical methods to analyze the impact of the pandemic on the overall cultural industries. Based on the panel data of listed companies, this paper explores the impact of COVID-19 on cultural industries from the perspective of stock market returns. The empirical results show that the pandemic has a significant negative impact on the stock market returns of cultural industries, but the degrees of impact on various creative sub-sectors are significantly different. The findings also indicate that digitalization can effectively reduce the negative impact of COVID-19 on cultural companies, and the epidemic has bigger negative impacts on small and newly-established cultural companies. Moreover, we find that the stock market returns of cultural industries have an inverted U-shaped relationship with the daily growth in total confirmed cases and in total cases of death caused by COVID-19, indicating that the negative marginal impact of COVID-19 on the cultural industries increases firstly and then gradually decreases. Finally, implications for companies and governments are presented respectively based on the findings.