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ID187815
Title ProperCOVID-19, firm exposure, and firm value
Other Title Informationa tale of two lockdowns
LanguageENG
AuthorDing, Haoyuan
Summary / Abstract (Note)We study how a public health crisis affects the corporate sector at different phases of outbreak. Using an event study approach, we find significant valuation effects in a sample of Chinese listed firms following two symbolic events in the outbreak of COVID-19: (1) the lockdown of Hubei province; and (2) the containment of the disease in China and its spread to overseas. Market responded negatively (positively) to the first (second) event. Regression analysis further reveals that, following the first event, firms with Hubei (foreign) exposures earned significantly lower (higher) returns. Foreign exposures, however, had significantly negative effects on returns following the second event. The valuation effects of Hubei and foreign exposures also vary across firm ownership and industries. Our results indicate that, in a globalized world, firms' international status, internal networks and input-output linkages all play important roles in determining their exposures to the pandemic.
`In' analytical NoteChina Economic Review Vol. 71; Feb 2022: p.101721
Journal SourceChina Economic Review 2022-01 71
Key WordsChina ;  COVID-19 ;  Firm Exposures ;  Valuation Effect