Probability of informed trading during the COVID-19 pandemic: the case of the Romanian stock market Financial Innovation Full Text Leave a comment

However, Giudice and Paltrinieri (2017) suggest that the irrational withdrawals of retail investors during the Ebola and the Arab Spring events damage the managers’ ability to generate extra-performance. Except for the above significant impact, some studies also argue that there is no evidence about the impact of institutional investor’s trading on returns. For example, Griffin et al. (2003) show no evidence that investors’ trade imbalances predict return movements at the daily frequency.

• Even in the current circumstances, customs authorities must always be in the position to assess the fulfillment of the criteria within the deadlines foreseen by the legislation.
• This paper analyzes the impact on trade of government-imposed containment measures used to arrest the spread of Covid-19.
• Trade facilitation is particularly important for the MSMEs hit hardest by the crisis.
• The point value followed a V-shape, becoming more negative between February and April and less negative afterward.
• This is a mandatory approach since the uncertainty regarding the evolution of the COVID-19 virus and the vaccine was extremely high.
• 13Data on the share of jobs that can be done at home are from Dingel and Neiman (2020).
• For a global population of more than 7 billion, the starting point is thus roughly 14 billion doses.

Curcuru et al. (2011), Ülkü and Ikizlerli (2012), Porras and Ülkü (2015) and Ülkü (2015) report that negative feedback trading by foreigners is mainly confined to positive local returns. To avoid the impact from the continuous net foreigners’ inflow (Bekaert et al., 2002) in the first years after the implementation of Stock Connect Program and the further opening measures proposed in 2018, we choose 1 January 2019 as the start of the sample period. The prior research about the effects of epidemic disease outbreaks on financial performance using event study method have chosen the date that the diseases became known to the media (Kim et al., 2020, Ramelli and Wagner, 2020, Ding et al., 2020). Meanwhile, the workers from Wuhan with qualified nucleic acid test could go back to their original position in other provinces, which indicates that the COVID-19 in China has been under control and the Chinese economy is returning to normal. Therefore, we choose 31 March 2020 as the end of the COVID-19 crisis, and explore investors’ behavior in the crisis from 31 December 2019 to 31 March 2020. To evaluate the stationary of all series, the augmented Dickey–Fuller (ADF), DF-GLS and Phillips–Perron (PP) unit root tests are used.

Submission of proof of preferential origin during the COVID-19 crisis

In October 2021, Moderna announced plans to build a 500-million-dose mRNA vaccine production facility in Africa, but the site had not yet been selected. Finally, in another long-run initiative, the European Commission announced in May it would provide €1 billion to help “develop a number of regional manufacturing hubs across the continent.” It is remarkable that the world acted with unprecedented speed to invent https://www.bigshotrading.info/ multiple life-saving vaccines, get them through clinical trials and rigorous regulatory processes, and manufacture as well as distribute 6.5 billion doses globally so far. COVAX, the consortium organized by Gavi (the Vaccine Alliance), the Coalition for Epidemic Preparedness Innovations (CEPI), and the World Health Organization, was established early for distributing COVID-19 vaccines to poor countries.

In addition, share buybacks also have a significant impact on earnings per share (Farrell et al. 2014; Almeida et al. 2016). Practitioners and academics alike consider the undervaluation hypothesis as one of the most important reasons for share buybacks (Vermaelen 1981; Ikenberry et al. 1995; Chan et al. 2004; Brav et al. 2005; Liang 2012). To have a more comprehensive view of the distribution of PIN, we present the histogram in Fig. The results clearly suggest that explaining the factors influencing the level of PIN during the COVID-19 pandemic could provide some misleading results when using a linear approach such as Panel Fixed Effects or Panel GMM.

Trade Policy for Today’s World

Questions have been raised about investors’ reactions since the outbreak differed from one capital market to another due to various cultural, demographic, and country-specific factors. For example, Fernandez-Perez et al. (2021) have found that cultural aspects are of great importance in the way investors assimilate new information during the COVID-19 pandemic. Specifically, their results have shown larger declines and higher volatility in stock markets within countries characterized by lower individualistic behaviour and higher tendencies to avoid uncertainty, during the first three weeks after the first announcement of the COVID-19 case. Furthermore, Kizys et al. (2021) have found evidence of https://www.bigshotrading.info/blog/trading-the-coronavirus/ herding behaviour in the first three months of the COVID-19 outbreak, which has been gradually reduced afterwards by a powerful government response to the pandemic. Bouri et al. (2021) have also studied the effect of the Covid-19 pandemic on investor herding behaviour using a sample of 49 international stock markets and have found solid evidence of herd formation mainly during the Covid-19 outbreak period. The herding behaviour following the pandemic-induced uncertainty has been identified to be more intense in the emerging capital markets, as well as in the Southern European Countries (like Portugal, Italy, Greece, and Spain), whose economies have been amongst the hardest hit by the pandemic.

Similar to our paper, Liu et al. (2021) find that demand factors and government-imposed containment measures were more important than supply factors and voluntary measures in explaining the trade-reduction effect of Covid-19. We contribute to this literature by estimating the effect of Covid-19 containment measures on trade and doing it using firm-level data, which enables us to control for all firm, product, and month-specific factors that may also correlate with the value of exports and imports. We also augment previous analyses by showing that firms selling to destinations where the share of jobs that could be done at home was large, exporters of non-outdoor goods, and manufacturers participating in GVCs were more resilient to the negative impact of the pandemic on exports.

International firms: More exposed but more resilient during Covid-19

A possible future direction of the study to be taken into account can be to extend the database to a panel of data during a similar uncertainty period. To account for the impact induced by the novel pandemic, we include, alongside the control variables, three additional measures related to COVID-19 extracted from the RavenPack analytics tool. This platform provides real-time media analytics and statistics, related to the Coronavirus pandemic and various topics from corporate finance to financial markets. It covers sources such as Dow Jones Newswire, Wallstreet Journal, and StockTwits among others (Haroon and Rizvi 2020; Umar et al. 2021). 2, both measuresFootnote 12 experienced a substantial decrease during the COVID-19 lockdown compared to the previous period,Footnote 13 followed by a moderate recovery in the next months.