Covid-19 and Firms' Stock Price Growth: The Role of Market Capitalization

Markus Brueckner (), Wensheng Kang () and Joaquin Vespignani
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Markus Brueckner: Research School of Economics, Australian National University, https://www.cbe.anu.edu.au/about/staff-directory/?profile=Markus-Brueckner
Wensheng Kang: Department of Economics at Kent State University, Ohio, USA, https://www.kent.edu/business/wensheng-kang-phd
Authors registered in the RePEc Author Service: Markus Brueckner

No 2021-09, Working Papers from University of Tasmania, Tasmanian School of Business and Economics

Abstract: This paper studies the role of capitalization on firms' stock price growth in response to new cases of Covid-19 infections in the United States. Controlling for firm and time fixed effects, our panel model estimates show that the effect of new cases of Covid-19 infections on firms' stock price growth is significantly increasing in capitalization: For each one standard deviation increase in capitalization, a one standard deviation increase in new cases of Covid-19 infections increases the weekly growth rate of firms' stock prices by about 0.7 percentage points. Effects of capitalization on the impact that Covid-19 infections have on firms' stock price growth are largest in the travel, tourism, and hospitality sector. Smaller but still positive effects of capitalization are present in the pharmaceutical products, high-tech, and banking and finance sectors.

Keywords: Covid-19; performance of firms; stock market capitalization; U.S. stock market (search for similar items in EconPapers)
JEL-codes: E30 G10 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2021
New Economics Papers: this item is included in nep-mac
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Published by the University of Tasmania. Discussion paper 2021-09

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Related works:
Journal Article: Covid-19 and Firms’ Stock Price Growth: The Role of Market Capitalization (2023)
Working Paper: COVID-19 and firms’ stock price growth: The role of market capitalization (2021)
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