The impact and role of COVID-19 uncertainty: A global industry analysis

Szczygielski, Jan Jakub; Charteris, Ailie; Bwanya, Princess Rutendo; Brzeszczyński, Janusz

Abstract

The novel 2019 coronavirus (COVID-19) has resulted in uncertainty that permeates every aspect of life and business. In this study we undertake a comprehensive analysis of the impact of COVID-19 related uncertainty on global industry returns and volatility using a sample of 68 global industries and Google Trends search data to measure COVID-19 related uncertainty. The results indicate that COVID-19 related uncertainty negatively impacts returns on all industries and generally leads to higher volatility. We interpret these findings as uncertainty related to the future financial performance of firms and emerging opportunities for some industries. Certain industries are more resilient than others and increased uncertainty is not only necessarily associated with industries that experienced the largest negative returns. We also find that new factors emerged in the return generating process during the COVID-19 period. We show that despite an uncertain climate, some industries performed well, yielding positive cumulative abnormal returns that at times are greater than during the pre-COVID-19 period. The implications of our findings for investors are discussed.

Citation

Szczygielski, J. J., Charteris, A., Bwanya, P. R., & Brzeszczyński, J. (2022). The impact and role of COVID-19 uncertainty: A global industry analysis. International Review of Financial Analysis, 80, Article 101837. https://doi.org/10.1016/j.irfa.2021.101837

• Journal Article Type: Article
• Acceptance Date: Jun 22, 2021
• Online Publication Date: Jul 2, 2021
• Publication Date: 2022-03
• Deposit Date: Apr 1, 2025
• Journal: International Review of Financial Analysis
• Print ISSN: 1057-5219
• Electronic ISSN: 1873-8079
• Publisher: Elsevier
• Peer Reviewed: Peer Reviewed
• Volume: 80
• Article Number: 101837
• DOI: https://doi.org/10.1016/j.irfa.2021.101837
• Keywords: COVID-19, pandemic, returns, volatility, industries
• Public URL: http://researchrepository.napier.ac.uk/Output/4220396