Government responses to COVID-19 and industry stock returns

Elie Bouri, Muhammad Abubakr Naeem, Safwan Mohd Nor, Imen Mbarki, Tareq Saeed

Research output: Contribution to journalArticlepeer-review

44 Citations (Scopus)


Governments around the world have responded to the COVID-19 outbreak with a mix of policies. The strictest responses of the New Zealand government are notable, given their abilities to contain and limit the spread of the virus. However, their impacts on stock returns remain unclear. This paper investigates the impact of three policies, namely lockdown, the stimulus package, and the travel ban, on the returns of 14 New Zealand industry stock indices. Using daily data from 1 January 2019 to 25 August 2020, evidence points to a heightened level of integration among the various industry stock indices during the early stages of the pandemic. Only lockdown has had a positive impact on aggregate stock returns, suggesting its ability to raise investors’ confidence in the overall stock market. At the industry level, the impact of the three response policies is generally positive but heterogeneous across industry stock indices. Notably, none of the three adopted policies significantly impact technology, healthcare, and real estate returns.

Original languageEnglish
Pages (from-to)1967-1990
Number of pages24
JournalEconomic Research-Ekonomska Istrazivanja
Issue number1
Publication statusPublished - 2022
Externally publishedYes


  • COVID-19 outbreak
  • equi-correlation
  • Government response
  • industry stock returns
  • New Zealand

ASJC Scopus subject areas

  • Economics and Econometrics


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