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, the authors observe a negative and statistically significant stock price reaction to the announcement of COVID-19 as a global pandemic. In contrast, the authors 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).

• Record URL:
  • https://doi.org/10.1016/j.jairtraman.2022.102281
• Record URL:
  • http://www.sciencedirect.com/science/article/pii/S0969699722001004
• Availability:
  • Find a library where document is available. Order URL: http://worldcat.org/oclc/31005945
• Supplemental Notes:
  • © 2022 Elsevier Ltd. All rights reserved. Abstract reprinted with permission of Elsevier.
• Authors:
  • Martins, António Miguel
  • Cró, Susana
• Publication Date: 2022-10

Language

• English

Media Info

• Media Type: Web
• Features: Appendices; References; Tables;
• Pagination: 102281
• Serial:
  • Journal of Air Transport Management
  • Volume: 105
  • Issue Number: 0
  • Publisher: Elsevier
  • ISSN: 0969-6997
  • Serial URL: http://www.sciencedirect.com/science/journal/09696997

Subject/Index Terms

• TRT Terms: Airlines; COVID-19; Economic impacts; Stocks
• Subject Areas: Aviation; Economics; Finance; Security and Emergencies;

Filing Info

• Accession Number: 01857903
• Record Type: Publication
• Files: TRIS
• Created Date: Sep 16 2022 4:31PM